Crypto hedge fund Galois Capital is reportedly closing down in the wake of the collapse of cryptocurrency exchange FTX, which caused a wave of contagion in the industry. According to reports, the firm had over 50% of its assets tied up in FTX before the exchange went under.
Co-founder of Galois Capital, Kevin Zhou, expressed regret at the firm’s closure, stating that it was financially and culturally unwise to continue operating.
Zhou went on to explain that the chain of events leading up to Galois Capital’s shutdown started with the crash of the Terra-Luna ecosystem and the Three Arrows Capital’s (3AC) credit crisis. Despite the setbacks in the crypto industry, Zhou remains optimistic about the long-term future of cryptocurrencies.
According to a Financial Times (FT) report, Galois Capital’s investors will receive 90% of their funds, with the remaining 10% being held until discussions with auditors and administrators are completed.
In November 2022, Zhou informed investors that it would take some time to recover trapped funds from FTX, but the team was working hard to maximize their chances of doing so. At the time, Zhou was unsure whether Galois Capital would continue operating as usual or become a proprietary trading shop.
The shocking collapse of FTX in 2022 led to the demise of several other crypto firms and institutions, including BlockFi and Genesis Trading, filing for bankruptcy.
Following the FT report, Galois Capital confirmed the news in a tweet, thanking the crypto community for their support and acknowledging the end of an era for the company. The tweet also stated that the firm was proud of its positive performance from its inception until its closure.
Before the exit of Galois capital, it was one of the largest crypto hedge funds that specialised in algorithmic market-making and over-the-counter trading. It was co-founded by Kevin Zhou and Mael Barut in 2017.
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