Galois Capital shuts down in aftermath of FTX collapse News ▸ US ▸ FTX ▸ Bankruptcy
Galois Capital shuts down in aftermath of FTX collapse
Galois Capital co-founder Kevin Zhou said the firm had up to $40 million trapped on FTX, leading to the closure of its trading operations.
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Updated: Feb. 20, 2023 at 8:32 am UTC
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Galois Capital has moved to shut down its hedge fund operations following a $40 million loss resulting from the FTX collapse, according to the Financial Times (FT).
The U.S.-based hedge fund managed about $200 million in assets on behalf of its clients. Following the FTX collapse, Galois Capital co-founder Kevin Zhou disclosed that the fund had up to $40 million trapped on FTX.
However, in a letter made available to FT, Zhou said:
“Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally.”
Zhou added that the hedge fund would sell its claim on FTX since the bankruptcy proceedings can last up to a decade.
Following his announcement, Galois Capital has reportedly sold its claims for roughly 16 cents on the dollar.
Furthermore, Galois Capital clients will receive up to 90% of the funds not trapped on FTX, while the remaining 10% will be withheld until the hedge fund’s auditing process is finalized.
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Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.