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Crypto hedge fund galois capital has been forced to close after it has been revealed that half its assets have been trapped on crypto ftx swap.
A hundred million dollars trapped in a FTX.
Another casualty was the FTX catastrophe. This time it is one of the biggest quantitative funds crypto-centered, galois capital. According to a recent financial-era report, the company, which processed approximately $200 million in assets in 2022, ceased trading and closing all positions. With nearly half of the active population, i.e, $100 million or thereabouts, part of the hedge fund still stuck in the ftx exchange now dead, the fund had to close its doors and give back the remaining funds to investors.
The contagion of FTX is still going on.
The FTX debacle has been the biggest blow to the crypto space in 2022, a year already littered with several bankruptcies and market crashes. A number of other companies and funds had to close down due to their extended exposure to the cryptography exchange, which went bankrupt in November 2022. The situation has already been likened to the infamous lehman brothers disaster of 2008, where hedge funds had billions of dollars trapped on the stock market. The co-founder of ftx, Sam Bankman-Fried, was accused of fraud by the police and pleaded not guilty.
The co-founder reaches out to customers.
Co-founder, Kevin Zhou, took to the company’s official Twitter account to confirm the report, saying,
“Yes, it is true that our flagship fund is shutting down…Even though we lost almost half of our assets as a result of the FTX disaster and sold the claim on the dollar, we are among the few who close shop with a start of performance to this day which is still positive...While this is the end of an era for Galois, our work together in recent years has not been in vain."
Zhou became famous as one of the first people to predict the possibility of the collapse of the TerraUSD ecosystem prior to its occurrence. He has now addressed clients with the claim that the fund would return 90% of the money not trapped on FTX while temporarily retaining the remaining 10% until matters are resolved with regulators and auditors. He also claimed that the decision was made to sell the fund’s claim on FTX instead of going through an elaborate legal process since bankruptcy proceedings could last over a decade. In his view, the fund sold his application for approximately 16 cents on the dollar.
