Crypto hedge fund Galois is set to shut down its business after losing half of its total assets to the collapse of the once-giant crypto derivatives exchange FTX, the Financial Times reported Monday.
“Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally. Once again I’m terribly sorry about the current situation we find ourselves in,” Kevin Zhou, the co-founder of Galois, said.
Galois Ceases Operations
Galois’ failure to continue its business operations dates back to November 2022, when FTX’s bankruptcy came to the limelight. At that time, the hedge fund revealed that it could pull out half of its assets under management from FTX before its collapse.
Since the company recorded total assets worth about $200 million, it is likely that about $100 million remains in the custody of the bankrupt derivatives exchange.
In the latest announcement, the hedge fund informed its customers that they would receive 90% of the funds not stuck in FTX. The remaining 10% would temporarily stay in the firm’s custody until administrators and the auditor have concluded consultations.
Galois’ co-founder also commented on his company’s strategy to pursue its claim on FTX. This claim is a representation of the funds stuck on FTX. Zhou noted that Galois would sell its claim on FTX, instead of undergoing lengthy legal processes that can last for as long as a decade. The firm has currently sold its claim for around $0.16.
FTX’s Debacle Plagues Many
Aside from Galois, reports show that FTX’s failure has affected as many as one million creditors. Since the collapse of FTX and its affiliated firms in November, it has grappled with coordinating its finances.
Last month, the embattled exchange revealed $5.5 billion worth of assets on its balance sheet. However, the company has not settled with its creditors as it remains under Chapter 11 bankruptcy protection.
Crypto firms like Genesis, Gemini, BlockFi, and others are yet to recover from the ripple effects of FTX’s catastrophic failure.
