According to BlockBeats, on July 15, Galaxy Interactive accused its former general partner Richard Kim of misappropriating at least $3.67 million from his new blockchain startup, Zero Edge. Kim, who left Galaxy in March 2024 to establish Zero Edge, admitted to losing most of the funds in a series of poor cryptocurrency trades. He disclosed that Zero Edge had raised over $7 million from investors and completed its seed round of financing two months ago. Following these losses, Kim resigned from his position at Zero Edge.

Kim explained that the losses were exacerbated by a significant drop in Bitcoin prices last month. A spokesperson for Galaxy stated that the company had a minor balance sheet investment in Zero Edge and reported Kim's actions to authorities along with other investors. The spokesperson declined to specify the exact amount of Galaxy's investment in Zero Edge.

Kim has since turned himself in to the U.S. Securities and Exchange Commission (SEC) through its public whistleblower hotline. In an interview, Kim expressed remorse, stating, 'Part of the reason I reached out to the SEC was to say, okay, guys, I really messed up. I lost this money. This is serious negligence. But I did not intend to abscond with the funds.'