Galois Capital Closes, Another Victim of FTX
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An editor at Coincrop
20 Feb 2023 | 3 min read
fter being ensnared in the dramatic closure of FTX, Galois Capital is unfortunately ceasing operations and refunding their remaining funds to investors. This crypto hedge fund had half of its assets situated on the defunct cryptocurrency exchange before it shut down unexpectedly. The Financial Times reported that this tragedy has caused Galois Capital to close for good.
"Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally," As shown in the documents accessed by Financial Times, Kevin Zhou, co-founder of Galois Capital, penned them. "Once again I'm terribly sorry about the current situation we find ourselves in."
In November, FTX found itself in an unfortunate predicament; it was unable to fulfill customer withdrawal requests and consequently had to file for bankruptcy protection. This left a million of its creditors high and dry with Galois Capital alone set to lose around $100 million as reported by the FT at that time. Zhou warned all investors that it would take years before they could retrieve "some percentage" of their funds back.
On Monday, the Financial Times reported that Galois had sold its bankruptcy claims for a mere 16 cents on the dollar. Unfortunately, this means investors are only entitled to 90% of their funds trapped in FTX - with 10%, held back until talks between administrators and auditors have been completed.
"This entire tragic saga starting from the luna collapse to the 3AC [Three Arrows Capital] credit crisis to the FTX/Alameda failure has certainly set the crypto space back significantly," wrote Zhou in the documents seen by FT. "However, I, even now, remain hopeful for crypto's long-term future."
MikeAn editor at Coincrop
Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.
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