Crypto Hedge Fund Galois Capital Shuts Down After Losing $40M to FTX

Galois co-founder said the fund has halted all trading as it is no longer viable post-FTX.

AccessTimeIconFeb 20, 2023 at 5:57 a.m. UTC
Updated May 9, 2023 at 4:08 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

One of the world’s largest crypto-focused quantitative funds, Galois Capital, has called it quits after losing a sizable portion of its capital in the collapse of the FTX crypto exchange, the firm said in a tweet on Monday.

"Thank you all for the kind words. Yes, it is true that our flagship fund is shutting down," Galois Capital tweeted after the Financial Times reported on the fund closing.

In November, CoinDesk reported that Galois Capital had $40 million stuck at FTX. At the time, Zhou told his investors that it would take a few years to recover “some percentage” of the funds.

“We will work tirelessly to maximize our chances of recovering stuck capital by any means,” he told investors at the time.

The FT reported that Galois has sold its bankruptcy claims for 16 cents on the dollar. In January, CoinDesk reported that FTX claims were going for around 13 cents on the dollar on the bankruptcy marketplace Xclaim.

“This entire tragic saga starting from the [Terra] 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 a note seen by FT. “However, I, even now, remain hopeful for crypto’s long-term future.”

According to the FT report, Galois will return the remaining money to its investors.

UPDATE (Feb. 20, 2023, 08:51 UTC): Updates headline and lead with confirmation.

UPDATE (Feb. 20, 2023, 12:00 UTC): Adds additional details.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.