According to a report, cryptocurrency hedge fund Galois Capital is closing after half of its assets became trapped in the insolvent exchange FTX.
The company informed investors that it had suspended all trading activities and sold off all of its positions because it was no longer viable. Galois intends to give investors their money back.
In a letter to investors, co-founder Kevin Zhou stated, due to the FTX situation, they do not think it is tenable to continue managing the fund both financially and culturally. He further apologized for the situation.
Half of the $200 million in assets the crypto-focused investment firm managed last year were locked on the exchange when FTX crashed, making it one of the most well-known victims of the collapse.
90% of the money that isn’t held by FTX will be returned to the fund’s clients; the remaining 10% will be temporarily put on hold until all negotiations are concluded. According to the report, Galois liquidated its bankruptcy claims for 16 cents on the dollar.
On Monday, Zhou posted on the company’s Twitter page to confirm that the flagship fund is closing.
He stated that they are among the few closing businesses with a positive inception-to-date performance, despite having lost over half of our assets to the FTX catastrophe and selling the claim for cents on the dollar.
FTX announced last month that it had found more than $5 billion in assets that could be used to pay back creditors, a sum greater than the initial $1 billion or so in assets management claimed they had located in December.
A bankruptcy filing from the cryptocurrency exchange’s collapse in November revealed that it owed roughly $3 billion to 50 of its biggest creditors, all of whom were consumers.
