The crypto world was rocked recently with the news that one of the world’s largest crypto-focused quantitative funds, Galois Capital, has called it quits after losing a sizeable portion of its capital in the collapse of FTX. According to a report from the Financial Times, Galois Capital co-founder Kevin Zhou wrote in a note that “Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally.”
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. However, the FT reported that Galois has now 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.
Zhou expressed his regret in the situation, writing in a note seen by FT that “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.” Despite the setback, Zhou remains hopeful for crypto’s long-term future.
The collapse of FTX has been a major blow to the crypto world, and the closure of Galois Capital is a stark reminder of the risks associated with investing in crypto. While the future of crypto remains uncertain, it is clear that investors must be aware of the potential risks and exercise caution when investing in the space.