Crypto hedge fund Galois Capital is shutting down after losing about half of its assets to the FTX disaster. “Given the severity of FTX’s situation, we do not believe it is viable to continue operating the fund both financially and culturally,” the fund’s co-founder told investors.
Crypto Hedge Fund Shuts Down Due to FTX Collapse
Crypto hedge fund Galois Capital is shutting down as almost half of its assets are locked up in FTX, the collapsed cryptocurrency exchange that filed for bankruptcy in November last year. “Galois Capital is a crypto hedge fund that specializes in over-the-counter trading and algorithmic market making,” their website describes.
Galois Capital told investors that all trading has stopped and all their positions have been cancelled, according to documents seen by the Financial Times. Galois co-founder Kevin Zhou wrote:
Given the seriousness of FTX’s situation, we do not believe that it is sustainable to continue operating the fund both financially and culturally… I am very sorry for the current situation we find ourselves in.
Hedge fund clients would receive 90% of the money not trapped in FTX, Galois said, adding that it is temporarily holding the remaining 10% until talks with fund managers and the auditor are finalized. Since he informed investors of his closing, Galois has sold the fund’s claim to FTX for about 16 cents on the dollar, the publication reported. Galois previously told Bloomberg that he had up to $45 million in assets exposed to the FTX bankruptcy.
Zhou is known for warning of the impending implosion of the cryptocurrency terra (LUNA) and the stablecoin Terrausd (UST) last year. He also benefited from the short sale of LUNA, now called LUNA classic (LUNC). Zhou opined:
This entire tragic saga, from the Luna collapse to the 3AC credit crisis to the FTX/Alameda failure, has certainly set the crypto space back significantly.
Following news of the closure of his hedge fund, Zhou took to Twitter to confirm the closure of Galois’s flagship fund. She tweeted on Monday:
Despite that, I’m proud to say that even though we lost nearly half our assets to the FTX disaster and then sold the claim for pennies on the dollar, we’re among the few closing shop with inception-to-date performance. . which is still positive.
“While this is the end of an era for Galois, the work we have done together over the past few years has not been in vain. I can’t say more than this for now,” concluded the Galois co-founder.
What do you think about the closure of the Galois Capital cryptocurrency hedge fund due to its assets being trapped on the crashed FTX crypto exchange? Let us know in the comments section.
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