Galois Capital Fund closed because of assets stuck on FTX

Galois Capital, one of the hedge funds that suffered the most after the collapse of FTX, has decided to cease operations and will return the remaining funds to investors when it sees that the probability of recovering funds soon is not high.

Galois Capital officially shut down after being stuck on FTX
Galois Capital officially stopped working after stuck assets on FTX. Photo: CryptoSlate

At the end of 2022, Galois Capital is said to have $200 million under management and is one of the largest quantitative trading institutions in the cryptocurrency industry. According to the letter sent to the investor, Financial Times At a glance, Galois Capital announced that it is no longer able to maintain trading and that all fund positions will be closed to refund investors:

“After the FTX incident, we think it is impossible to continue operating the fund both financially and culturally. Once again, I deeply regret our decision this time.” – Founder Kevin Zhou shared.

Information that Galois was stuck with assets on FTX was leaked in November 2022, just a few days after the exchange collapsed. While Financial Times revealed that Galois’s loss amounted to 100 million USD, Mr. Zhou claimed that the amount of money held on FTX was only 40 million USD.

>> See more: Investment fund that won short LUNA was stuck at 40 million USD on FTX

Galois said in the letter that clients will get about 90% of their funds not stuck on FTX. The remaining 10% will be kept temporarily until the procedures with the regulatory body and audit are completed.

Mr. Zhou also said in the letter that the fund will sell “claims” related to the FTX case. This move is explained by the founder because FTX’s bankruptcy process can take a decade, with many complicated legal procedures. As a result, the fund came to the decision to resell these papers for 16 cents per USD value to be handled by more professional organizations.

Mr. Zhou, who used to work at Kraken exchange, is well known in the crypto community after his harsh criticism of Terra and Luna. Also in the body of the letter, the founder of Galois Capital shared:

“This whole collapse stemmed from Luna, to the 3AC fund and finally the collapse of FTX – Alameda. However, for the time being, I am still very optimistic about the long-term future of the crypto market.”

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