2024-07-15 15:30

Galaxy says it has reported a former general partner, Richard Kim, to the authorities for misappropriating at least $3.67 million of company funds belonging to Zero Edge, Kim's crypto casino. Richard Kim is a former executive of Galaxy, the crypto firm headed by Michael Novogratz, as well as an alumnus of trading divisions at JPMorgan and Goldman Sachs and a former attorney with the prestigious law firm Cleary Gottlieb. Kim founded "Zero Edge," a crypto casino designed with the idea that customers should get equal odds with the house. Kim said in an interview that following a $7 million fundraising for Zero Edge, Kim entered into leveraged crypto trades that lost big as the bitcoin price fell in June. Kim resigned on July 2, according to an email sent by the company to investors. Galaxy was one of the investors, and says it has reported the conduct to authorities, but says the amount was "immaterial." It's a tale as old as crypto, and maybe finance itself: One little money mistake leads to another, and suddenly a company founder is down a deep hole, with investors clamoring for their funds back. In this case one of the investors is Galaxy, the prominent crypto firm headed by former Goldman Sachs and Fortress Investment Group executive Mike Novogratz. The company founder, Richard Kim, was previously a general partner at Galaxy Interactive, a gaming-focused venture fund under Galaxy. He also worked at the Wall Street banks JPMorgan and Goldman Sachs, following a stint at the prestigious law firm Cleary Gottlieb in the late 2000s, according to a bio. In an interview with CoinDesk, he said his cascading losses were fueled by a decades-long struggle with gambling. Galaxy is one of several investors who are now the victims after Kim acknowledged misappropriating at least $3.67 million of company funds belonging to Zero Edge, a new blockchain startup led by Kim – until recently. Kim pitched Zero Edge as a first-of-its-kind crypto casino, meant to level the playing field and give gamblers transparency. The name suggests that the house in the casino has no advantage over its customers. In an interview with CoinDesk, Kim said Zero Edge raised more than $7 million in funding from investors, officially closing on a seed round less than a month ago. He stepped down from his role at the company after admitting to investors that he lost most of their funds in a series of bad crypto trades. Kim told CoinDesk that the losses mounted as the bitcoin (BTC) price tumbled last month. The largest cryptocurrency's price has fallen to about $62,000 now from close to $70,000 at the start of June. "Mr. Kim left Galaxy in March 2024 to start Zero Edge, a company in which Galaxy had an immaterial balance-sheet investment," a spokesperson for Galaxy told CoinDesk. "Upon learning of certain actions taken by Mr. Kim in his role at Zero Edge, we, along with other investors, reported his conduct to the authorities." Galaxy's spokesperson declined to specify the size of the firm's investment in Zero Edge. 'Guys, I really f----d up.' Kim said he also reported himself to the U.S. Securities and Exchange Commission's public tip line. "Part of my rationale in reaching out proactively to the SEC was to say, OK guys, I really f—d up. I lost this money. It was grossly negligent. But I didn't intend to go run away with this money," Kim told CoinDesk. In an email obtained by CoinDesk that was circulated to Zero Edge shareholders this month, the company said it closed a seed financing round on June 20. By the very next day, according to the email, Kim "had begun placing leveraged positions on some cryptocurrencies, resulting, over the course of the next several days, in the significant loss of company funds." On June 29, according to the email, he informed the company's board of directors that he had "lost approximately $3.67 million in company funds," and that he was solely responsible for the loss. "Since learning of these events, the company and the board have asked Mr. Kim to resign," the email reads, and he "submitted such resignation on July 2." Downward spiral "The downfall began with a careless mistake - a phishing site that cost $80k," Kim said in his own recollection of what went wrong, which he shared with CoinDesk in a written statement. "This triggered my old demons, the need to 'make it back' to preserve my reputation." According to Kim, he "started down a negative spiral of leverage trading, raising more capital, and hiding the truth." "By the seed round's close," said Kim, "I was ready to rebuild, to start fresh, putting past demons aside. But the moment I received the proceeds, something snapped. I felt compelled to make up for my missteps. Within days, millions were in leveraged longs. When bitcoin crashed, I experienced a complete wipeout." The Zero Edge incident is the latest shenanigan to hit the blockchain industry's growing venture capital scene, which has been marred by controversy since its inception. Just a week ago, CoinDesk reported that Niraj Pant, a former general partner at top-tier crypto venture firm Polychain, had broken the fund's policies by making a secret financial arrangement with a company that he helped the fund invest in. The Zero Hedge incident amounts to a dramatic fall from grace for Kim, who graduated from the University of Washington at age 18 and the prestigious Columbia Law School at only 21, in 2007. Before joining Galaxy in 2018, Kim built an impressive resume in the traditional financial sector: From 2015-2018, he was a chief operating officer for Goldman Sachs' global foreign exchange and emerging markets trading division, where he helped to lead a buildout of the Wall Street firm's digital-assets franchise in 2018. Before that, he was the co-COO of global foreign exchange and emerging markets trading at JP Morgan. Kim says he remains intent on building out his vision of a blockchain-based casino and "has every intention" of paying back his investors. He disagrees with decisions made by his partners and the company's board to, in his view, wind the company down. Zero Edge did not immediately respond to a request for comment. Quoting Jung "We basically have a year of runway to build this thing," Kim said in his interview with CoinDesk. "Instead, the company was forced down the path – for reputational risk mitigation – to basically shut everything down, which, in my opinion, was not the optimal decision for the broader set of investors in the company." "I messed up catastrophically. But I refuse to give up," Kim added in his written statement. "To my investors: you didn't just back a project; you invested in my vision, my potential. I will continue building because the world desperately needs what we started. It is precisely the fact that I have proven untrustworthy that compels me to create trustless systems." In his statement, Kim cited the Jungian Swiss psychologist Marie-Louise von Franz, in turn quoting the Swiss psychiatrist Carl Jung himself as once saying, "To be in a situation where there is no way out, or to be in a conflict where there is no solution, is the classical beginning of the process of individuation. It is meant to be a situation with solution... Normally the anima does not take a man by the hand and lead him right up to Paradise; she puts him first into a hot cauldron where he is nicely roasted for a while." https://www.coindesk.com/tech/2024/07/15/founders-gambling-struggles-spur-crippling-loss-at-crypto-casino-backed-by-galaxy/

2024-07-15 12:09

The latest price moves in crypto markets in context for July 15, 2024. Latest Prices Top Stories Bitcoin rose to over $62,500 following the weekend attack on Donald Trump, which seems to have also boosted the former president's chances of winning a second term in November. Having cemented himself as the pro-crypto candidate compared with President Joe Biden, Trump's election prospects have become a metric for the cryptocurrency market. BTC has rallied over 7% since the failed assassination attempt in Butler, Pennsylvania. At the time of writing, it is priced at $62,476, an increase of 3.95% in the last 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index (CD20), has risen by 3.32%. The probability of Donald Trump retaking the White House jumped to an all-time high on Saturday after the shooting at the Pennsylvania rally, according to traders on Polymarket. "Yes" shares in Polymarket's contract on whether Trump will win the presidency climbed 10 cents after the incident to 70 cents, meaning the market now sees a 70% chance he will prevail in November's election. Each share pays out $1 if the prediction comes true, and zero if not. Meme tokens named after Trump also surged after the shooting. MAGA, for example, rose 34% on a 24-hour basis to $8.38, according to CoinGecko data, and the satirical TREMP added 67% to $0.6471. BODEN, a joke asset named after Biden, slipped about 15% over 24 hours to $0.0333115. Alexey Pertsev, the co-founder and developer behind Tornado Cash, was denied bail by a Dutch court on Friday. Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process, but the court said "that continuing his detention does not obstruct his possibility to prepare his defense,” Keith Cheng, Pertsev's lawyer said according to the report. Pertsev was found guilty of money laundering by a Dutch judge at the s-Hertogenbosch court in May and handed 64 months prison time by the court. The verdict sent shock waves within the community leaving several outraged. The case has been described as the most pivotal legal case in crypto. Chart of the Day - Omkar Godbole Trending Posts Conduct Versus Code May Be the Defining Question in Roman Storm Prosecution SEC Drops Investigation of Bitcoin L2 Stacks and Builder Hiro, Filing Says Fed Might Focus on Weakening Labor Market Rather Than Inflation as It Mulls Rate Cuts: Economists https://www.coindesk.com/markets/2024/07/15/first-mover-americas-bitcoin-rises-above-625k-following-trump-shooting/

2024-07-15 12:00

Gradwell will be responsible for quantifying the Tether economy to regulators. Gradwell becomes head of economics at Tether, having spent over six years at Chainalysis. His goal at Tether is to help communicate how USDT is supporting dollar hegemony. Tether has hired the chief economist from blockchain analytics firm Chainalysis, Philip Gradwell, to take up a similar position at the stablecoin giant, where he will be responsible for quantifying the Tether economy to regulators, the company said on Monday. Gradwell spent over six years as chief economist at Chainanalysis, and will take up the role of head of economics at Tether. Tether, which mimics the U.S. dollar with blockchain-based token USDT, is far and away the largest stablecoin in circulation, with over $112 billion market capitalization. “My goal at Tether is to shift this conversation towards understanding how digital assets are used in the real economy, and how USDT is supporting dollar hegemony,” Gradwell said in a statement. https://www.coindesk.com/business/2024/07/15/tether-taps-chainalysis-chief-economist-philip-gradwell-as-economics-head/

2024-07-15 10:39

The asset manager is the largest public holder of bitcoin by virtue of its iShares Bitcoin Trust exchange-traded fund, which now holds more than 300,000 BTC. The world's largest asset manager, BlackRock (BLK), said assets under management (AUM) climbed through $10 trillion in the second quarter. AUM rose almost 13% from the year-earlier period to $10.6 trillion, while earnings per share (EPS) rose to $9.99 from $9.06, the company said in a statement. Revenue increased 7.7% to $4.8 billion. BlackRock is the largest public holder of bitcoin by virtue of its iShares Bitcoin Trust (IBIT) exchange-traded fund (ETF), which now holds more than 300,000 BTC BLK shares rose 1.2% to $838 in pre-market trading. Read More: BlackRock's BUIDL Fund Tops $500M as Tokenized Treasury Market Soars https://www.coindesk.com/business/2024/07/15/blackrock-assets-under-management-rise-through-10t/

2024-07-15 10:07

Pertsev sought bail to allow him to prepare for his appeal to the verdict in May which found him guilty of money laundering. Alexey Pertsev was denied bail by a Dutch court on Friday, according to DLNews. Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process Alexey Pertsev, the co-founder and developer behind Tornado Cash, was denied bail by a Dutch court on Friday, according to DLNews. Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process but the court said "that continuing his detention does not obstruct his possibility to prepare his defense,” Keith Cheng, Pertsev's lawyers said according to the report. Pertsev was found guilty of money laundering by a Dutch judge at s-Hertogenbosch court in May and handed 64 month prison time by the court. The verdict sent shock waves within the community leaving several outraged. The case has been described as the most pivotal legal case in crypto. Last month, Pertsev was denied digital facilities like a computer despite an 18 point presentation by Cheng to reflect that the case revolves around technical aspects of DeFi. Pertsev is a crucial source of knowledge for the kind of preparation that "cannot be done by a lawyer," Cheng told DLNews. Ameen Soleimani, Pertsev's friend who has started JusticeDao to help coordinate the legal defense in the Tornado Cash cases, wrote on X that "even if his appeal attempt is accepted, he will have to sit in prison for the next year or so while his defense lawyers prepare for the appeal hearing." Read More: Crypto Community Voices Outrage at Tornado Cash Developer Verdict https://www.coindesk.com/policy/2024/07/15/tornado-cash-co-founder-alexey-pertsev-denied-bail-by-dutch-court/

2024-07-15 09:26

Fan tokens are known to see anticipatory gains and post-tournament losses. The Spain National Fan token (SNFT) has dropped 20% in the past 24 hours. The losses likely represent "sell-the-fact" losses following Spain's victory in UEFA championship. Spain is reveling in the UEFA 2024 soccer championship victory, but the national team's official cryptocurrency, the Spain National Fan token (SNFT), is unenthused. On Sunday, Spain defeated England in the finals of the UEFA tournament, clinching a record fourth European Championship title as England's decade-long wait for a major tournament win continued. Still, the SNFT token has dropped by 20% to $0.024 in the past 24 hours and had a market capitalization of $565,000 at press time, according to Coingecko. Meanwhile, leading fan tokens like the Paris Saint-Germain Fan and FC Barcelona Fan tokens traded 2% to 4% higher alongside a renewed upswing in market leader bitcoin's price. The national team launched the SNFT token in 2021 in partnership with the Royal Spanish Football Federation and the Turkish blockchain platform Bitci. The token aims to enhance fan engagement and deliver a privileged experience for sports enthusiasts and investors. SNFT's price swoon likely represents a "sell the fact" loss. Prices surged just over 70% to $0.03845 in the three days leading up to the final. According to a research paper, fan tokens generally tend to experience anticipatory gains before the tournament and slide following the event. The so-called "buy the rumor, sell the fact" phenomenon was observed in the fan token market during the FIFA World Cup of 2022. That said, researchers are divided on the impact of soccer tournaments on the market value of fan tokens. A 2022 paper by Mieszko Mazur and Miguel Vega studied the correlation between fan tokens and field performance. The study showed that team performance does not affect fan token valuation irrespective of the tournament, and it added that these tokens tend to be volatile. "Even though a high first-trading day return of 150% was found, in the long-term, fan tokens underperform major crypto benchmarks such as Bitcoin (BTC) and decentralized finance (DeFi) coins," the study said. Meanwhile, another study showed bigger tournaments like the Champions League affect fan tokens due to the broader audience and high tournament prestige compared to the regional leagues. https://www.coindesk.com/markets/2024/07/15/spain-national-fan-token-slides-20-after-uefa-euro-2024-win/