Galois Capital announced it will shut down after losing a significant portion of its capital following the collapse of Sam Bankman-Fried’s FTX, according to a Financial Times report citing co-founder Kevin Zhou’s letter to investors.
According to Zhou, the business is no longer sustainable due to the “severity of the FTX situation.”
The letter added that all trading has ceased and the fund has reversed its holdings, with Galois reportedly selling his bankruptcy claims for approximately $0.16 on the dollar.
Investors will receive 90% of available funds not captured on the defunct crypto exchange, with the remaining 10% temporarily held by Galois until discussions with administrators and auditors are concluded.
“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”, wrote Zhou, the former head of trading at Kraken, on Monday.
Galois’ trapped means
Galois, a Texas-based crypto-focused quantitative fund with $200 million under management prior to the FTX collapse, so last November it had “significant exposure” to Bankman-Fried’s stock exchange, med Financial Times reported at the time that the firm could have had around half of its funds trapped on the platform.
In a note to investors, Zhou said that “this whole tragic saga” starting with the implosion of the Terra ecosystem in May 2022, continuing to the Three Arrows Capital (3AC) bankruptcy, and finally to the FTX and Alameda failure “has absolutely put the crypto space significantly back.”
“Although this is the end of an era for Galois, the work we have done together in recent years has not been in vain. I can’t say more than this for now. Stay tuned,” Zhou added in his Twitter thread on Monday.
“Crypto will endure,” he wrote, and “these setbacks are temporary and will happen.”
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