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As per reports, Galois Capital has nearly $100 million worth of funds stuck with the crypto exchange FTX.
The contagion of FTX’s collapse last year in November 2022 continues to spread across the crypto market. Crypto hedge fund Galois Capital has become the latest victim of the FTX collapse.
As per the details, Galois Capital has decided to shut down with nearly 50% of the total trapped on FTX. The crypto hedge fund said that it would be returning the rest of the funds to its customers. In the documents seem by Financial Times, Kevin Zhou, co-founder of Galois Capital, wrote:
“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.”
Crypto exchange FTX filed for Chapter 11 bankruptcy last year in November 2022 eroding $32 billion of the company’s valuations over a week’s time. The collapse of FTX has impacted some of the major players in the crypto space including top crypto lenders like Genesis and others.
As per the reports, Galois Capital had around $100 million in stock on the exchange as per the earlier report by Financial Times. Back then, Zhou had warned that it would take them a few years to recover “some percentage of the funds”.
Galois Capital Bankruptcy
The FT report today, February 20, notes that Galois Capital sold its bankruptcy claims for 16 cents to a dollar. Besides, the report also adds that Galois Capital investors will receive 90% of the money that isn’t trapped on the FTX exchange. It will continue to hold the remaining 10% until discussions with the auditor and administrators are finalized. Speaking further on the matter, Zhou said:
“This entire tragic saga starting from the luna collapse to the 3AC [Three Arrows Capital] credit crisis to the FTX/Alameda failure has certainly set the crypto space back significantly. However, I, even now, remain hopeful for crypto’s long-term future.”
However, Zhou has told investors that they will work “tirelessly to maximize our chances of recovering stuck capital by any means”. Recovery from FTX though could be a long process with the bankruptcy proceedings already in place.
Many analysts have earlier stated that there would be more collateral damage emerging from the FTX saga ahead in 2023.