Cryptocurrency crash: Former galaxy interactive executive loses millions of investors' money

Richard Kim, former head of Galaxy Interactive, the venture arm of Mike Novogratz's company, has found himself at the center of a scandal after losing $3.67 million out of $7 million raised to launch the Zero Edge crypto casino. This was reported by CoinDesk. Kim suffered significant losses due to leveraged trading following the sharp drop in Bitcoin's price in June. The use of borrowed funds played a fatal role in his trades. The entrepreneur admitted that he initially lost $80,000 to a phishing site, which marked the beginning of a series of misfortunes. In an interview with the publication, Kim said that the phishing site incident "awakened old demons," as he had been battling a gambling addiction for many years. "I felt the need to rectify my mistakes. Within days, millions were put into long leveraged positions. When Bitcoin crashed, it was a complete disaster," he said. Kim admitted to negligence and reported the loss of funds to the SEC hotline. "I really messed up. I lost that money. But I wasn't planning to run away with it," he added. In early July, he resigned. Galaxy, one of the investors in Zero Edge, also informed the authorities about the embezzlement of funds, calling their investment "insignificant."

Similar Cases in the Cryptocurrency World:

• May 2023: A key member of the decentralized exchange Cypher team, known as Hoak, admitted to embezzling part of the funds stolen in an exploit in August 2023. He explained his actions by a "severe gambling addiction."
• January 2022: The head of the cryptocurrency fund X Capital lost $2 million of investors' money after failing to close positions in time during a volatile market. It turned out he also suffered from a gambling addiction and tried to recoup on volatile assets.

These cases highlight the importance of responsible investment approaches and risk management in the cryptocurrency sector. The resurgence of old demons can lead to significant financial losses, and investors need to be especially cautious in their dealings.