Galois Capital Shuts Down After Facing FTX Losses
• Popular crypto hedge fund Galois Capital announced that it is shutting down after six years.
• The firm lost a significant amount of money due to the collapse of FTX last year.
• Galois Capital will return the remaining assets to investors and distribute the rest among auditors, administrators, and other stakeholders.
Galois Capital Shutting Down
Popular crypto hedge fund Galois Capital has announced that it will be shutting down after operating in the crypto space for six years. The firm revealed that it faced heavy losses due to the collapse of FTX last year and as such, is unable to continue operations both financially and culturally.
Losses From FTX Collapse
As one of the largest crypto-focused quantitative funds, Galois went from managing nearly $200 million in assets to reportedly losing $40 million in FTX. The hedge fund was able to recover some of its funds from the bankrupt exchange but nearly half of its assets have been stuck since November last year.
Returning Assets To Investors
Galois Capital plans to return its remaining funds to its investors after closing the firm. As per documents seen by FT, the firm informed its investors that it had halted all trading activities. In addition, 90% of the funds that weren’t stuck in FTX would be returned to the investors while 10% will remain with the fund until discussions with auditors, administrators, and other stakeholders have been finalized.
Selling Claims For 16 Cents On The Dollar
Co-founder Kevin Zhou stated that instead of going through a legal process and pursuing claims in bankruptcy court, they would opt for selling claims for approximately 16 cents on the dollar. He added “Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally.“
Galois Capital’s closure signifies a major blow within in crypto space as one of popular crypto hedge funds shuts down due to losses suffered duringFTX’s collapse last year. In order for investors to get their returns back, Galois has decided against pursuing legal action and opted instead for selling claims at 16 cents on each dollar lost during this difficult period