Key Takeaways:
- Galois Capital closes after leaving half of its assets trapped in FTX exchange.
- FTX contagion could still continue.
YEREVAN (CoinChapter.com) – Galois Capital, one of the world’s largest crypto-focused quantitative funds, said it was closing down in light of the FTX implosion in November 2022. Notably, the hedge fund was one of the highest-profile victims of the FTX scandal, having half its assets, nearly $40 million, trapped in the collapsed exchange.
The hedge fund’s clients will receive 90% of the funds not trapped in FTX, and the remaining 10% will be withheld until discussions with administrators are finalized.
Galois Capital Couldn’t Withstand the FTX Implosion
Galois Capital had ultimately decided to close and return its remaining money to investors. In a tweet on Monday, the firm said it “appreciated the outpouring of support.” “These setbacks are temporary and will come to pass,” added the bankrupt fund.
The firm’s co-founder Kevin Zhou asserted he couldn’t provide many details.
However, they noted that the hedge fund worked with law firms Schulte Roth and BTIG to run an auction and that they were happy with the result. “If any large claimants ($10m+) want advice on selling their claim, I’m happy to share some thoughts on the process and considerations involved,” added the fund.
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.
said Zhou.
Also read: BlackRock Lost 24M in FTX Collapse: (NYSE:BLK) Stock Crashes 21%.
Contagion Spreads
Galois Capital was only one of the crypto players that fell under the FTX implosion pressure.
Also read: Conflux Network’s China Telecom Connection Propels CFX Price By 488%.
The contagion’s first 2023 claim was crypto lender Genesis, which filed for Chapter 11 bankruptcy in January 2023. Moreover, there were rising concerns that Genesis’ parent company Digital Currency Group (DCG), could also be at risk.
As of Feb 21, there’s no evidence to suggest DCG might be having trouble. However, investors should watch the company and its subsidiary Grayscale, the largest Bitcoin fund.
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