Galaxy has accused its former general partner Richard Kim of misappropriating at least $3.67 million from his new blockchain startup Zero Edge, BlockBeats reported.

Zero Edge raised more than $7 million from investors and completed a seed round two months ago, said Kim, who resigned after admitting he lost most of the money in bad crypto trades.

Kim said the losses have been mounting as bitcoin prices plummeted last month.

A Galaxy spokesman said Kim left Galaxy in March 2024 to start Zero Edge, in which the company has an insignificant balance sheet investment. Galaxy and other investors reported Kim's behavior to officials after learning of it.

Kim has surrendered to the U.S. Securities and Exchange Commission (SEC), saying he was grossly negligent but had no intention of absconding with the money.