Digital Assets: Another Casualty From The FTX Saga – Crypto Hedge Fund Galois Capital Shuts Down

February 22, 2023 | Digital Assets, News

About half of Galois’ assets were stuck with FTX.

Quantitative hedge fund Galois Capital has decided to close down and return remaining money to investors after half of its assets were trapped on the collapsed cryptocurrency exchange FTX, according to documents seen by the Financial Times.

Galois Capital, one of the largest crypto-focused funds with around $200m in assets under management, had stopped all trading and unwound all its positions as it was no longer viable. Based in the US, Galois specialized in OTC trading and algorithmic market-making in crypto markets.

Founder Kevin Zhou wrote in a letter to investors that given the severity of the FTX situation, it was not tenable to continue operating the fund both financially and culturally. He also wrote that the fund’s claim against FTX had been sold for “cents on the dollar.”

“In spite of that, I am proud to say that although we lost almost half our assets to the FTX disaster and then sold the claim for cents on the dollar, we are among the few who are closing shop with an inception-to-date performance which is still positive,” tweeted Zhou.

The closure of the fund will see clients receive 90% of the money not trapped on FTX, with the remaining 10% temporarily held back until discussions with the administrators and auditor were finalized.

Zhou indicated his preference for selling the fund’s claim on FTX, rather than going through a lengthy legal process.

FTX and associated companies filed for insolvency in early November.

Zhou is known for his early criticism of cryptocurrency luna and linked stablecoin terraUSD ahead of their $40bn collapse last year.

Related Story:  More Crypto Players Follow FTX Down The Bankruptcy Route

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