Crypto hedge fund Galois Capital told CoinDesk in a Telegram message on Saturday that around half of its funds are stuck on FTX, the beleaguered crypto exchange which filed for chapter 11 bankruptcy protection on Friday.

The funds locked in FTX total around $40 million, Galois co-founder Kevin Zhou said.

Galois earned acclaim earlier this year for predicting the crash of Terra, the stablecoin ecosystem whose $60 billion collapse was one of the key reasons behind crypto's plunge into its present bear market.

Depending on how the bankruptcy proceedings progress, it may take a while for Galois – or any FTX investors – to retrieve any of their funds.

In a letter to Galois investors, Zhou wrote that it could take “a few years” for the firm to recover “some percentage” of its funds. “We will work tirelessly to maximize our chances of recovering stuck capital by any means,” he told investors.

FTX was, until recently, the second-largest cryptocurrency exchange by volume, and managed to earn a high degree of trust from sophisticated investors and institutional clients relative to other platforms.

Things started to go sour for FTX when leaked documents uncovered by CoinDesk showed that the firm’s sister company, Alameda Research, was collateralizing loans with illiquid tokens – including FTX’s own FTT token.

Eventually, a bank run ensued, revealing that FTX was not backing user funds 1:1 behind the scenes – meaning the firm could not honor withdrawal requests without billions in rescue capital.

Now, according to Zhou, Galois is considering whether it should continue operating as normal, pursue an acquisition or become a proprietary trading shop.