Crypto Hedge Fund Galois Capital Shuts Down Due to FTX Losses
Important takeaways
- Crypto hedge fund Galois Capital closes down.
- The firm claims that almost half of its assets were still on FTX when the exchange collapsed.
- It has already sold its FTX claims for 16 cents on the dollar.
Share this article
Crypto hedge fund Galois Capital is winding down its operations after losing roughly half of its assets to FTX.
16 cents on the dollar
The crypto industry is still dealing with the fallout from the FTX crisis.
Crypto hedge fund Galois Capital announced that it would shut down its services due to losses incurred in the FTX collapse. Despite managing to withdraw some funds, the firm still had almost half of its assets stuck on the exchange when it completely froze withdrawals.
“Given the severity of the FTX situation, we do not believe it is sustainable to continue operating the fund both financially and culturally,” co-founder Kevin Zhou told investors. “Once again, I am very sorry for the current situation we find ourselves in.”
According to the Financial Times, Galois managed around $200 million in assets by 2022. The hedge fund indicated that clients would receive 90% of the funds not locked up on FTX, while the remaining 10% would be temporarily withheld until discussions with auditors were concluded.
Galois sold his FTX claims for about 16 cents on the dollar, and Zhou explained to investors that he preferred to sell the claims early rather than go through a multi-year bankruptcy process.
Zhou took to Twitter to confirm the report. “I am proud to say that although we lost almost half of our assets to the FTX disaster and subsequently sold the claim for cents on the dollar, we are among the few to close shop with a performance to date that remains positive”, he posted, before hinting that other Galois-related projects were in the works.
Zhou distinguished himself in the cryptosphere when he repeatedly voiced concerns about the stability of Terra’s algorithmic stablecoin UST weeks before it collapsed. Galois Capital was also one of the main entities that encouraged miners to fork Ethereum when it transitioned to Proof-of-Stake to keep a Proof-of-Work chain going.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH and several other crypto assets.
