Former Galaxy Interactive Head Loses $3.6 Million in Crypto Casino Venture

The former head of Galaxy Interactive, the venture arm of Mike Novogratz’s company, lost investor funds intended for the launch of the crypto casino Zero Edge. The sum amounts to $3.67 million out of a total $7 million, reports CoinDesk.

Zero Edge founder Richard Kim suffered significant losses due to leveraged trading following a decline in the bitcoin price in June. He used borrowed funds in his trades.

In a comment to the publication, the entrepreneur stated that he initially lost $80,000 of investments due to a phishing site. Kim had struggled with a gambling addiction for many years, but this incident “awakened old demons.”

“I felt the need to correct my mistakes. Within days, millions were in long positions with leverage. When bitcoin crashed — it was a complete collapse,” he said.

According to Kim, he personally reported the loss of funds to the SEC hotline.

“[I admitted] that I really messed up. I lost that money. It was gross negligence. But I wasn’t going to run away with that money,” he added.

Kim resigned in early July. Galaxy, which was one of the investors in Zero Edge, also reported the misappropriation of funds to the authorities, describing its investment as “insignificant.”

Back in May, a key member of the decentralized exchange Cypher, known as Hoak, admitted to misappropriating funds stolen in an exploit in August 2023.

He explained his actions as a result of a “severe gambling addiction.”