Major crypto-focused quantitative fund Galois Capital has closed its doors and returned remaining funds to investors after becoming the latest victim in the fallout from the FTX scandal.
The US$200mln hedge fund was heavily affected when Sam Bankman-Fried’s cryptocurrency exchange collapsed, leaving nearly half its assets trapped.
Galois has ceased all trading and unwound its positions, and “we do not think it is tenable to continue operating the fund both financially and culturally”, co-founder Kevin Zhou was quoted as saying by the Financial Times (FT).
Zhou confirmed the news over Twitter, calling it “the end of an era”.
Galois is one of up to a million creditors left out of pocket following FTX’s collapse and subsequent Chapter 11 bankruptcy filing.
Clients will receive 90% of funds not tied up in FTX’s Chapter 11, according to the FT report, with the remaining 10% retained while discussions with auditors and administrators are held.
FTX creditors face years, possibly even decades, before recovering their funds, leading many to sell their claims at a massive discount on bankruptcy exchanges such as Xclaim.
Galois has reportedly sold its claim against FTX for 16 cents on the dollar. Proactive has reached out to the hedge fund for confirmation.