Galois Capital, a digital currency hedge fund with around half its assets stuck in the now-collapsed cryptocurrency exchange FTX, is reportedly winding down its operations and returning the remaining funds to investors. This move comes as FTX filed for bankruptcy protection in November 2021 due to its inability to fulfill customer withdrawal requests, leaving about a million creditors in a difficult situation.
According to reports, Galois Capital had approximately $100 million on the exchange. Kevin Zhou, the co-founder of Galois Capital, mentioned that due to the severity of the FTX situation, it was not feasible to continue running the fund for financial and cultural reasons.
He apologized for the present situation and stated, “Once again, I’m sorry about the current situation we find ourselves in.” The reports added that Galois Capital sold its bankruptcy claims for a minimal fee of 16 cents on the dollar.
Galois Capital’s closure will enable investors to receive 90% of the money not trapped on FTX. However, the firm will temporarily hold the leftover 10% until further discussions with the administrative bodies and auditor are concluded.
Zhou also reflected on the negative consequences of the cryptocurrency space’s recent tragic events. Nevertheless, he remains optimistic about the long-term future of cryptocurrency.
Regulatory Oversight And Transparency
Due to the difficulties encountered with FTX, awareness has been raised regarding the risks and challenges associated with crypto exchanges. They have increasingly become targets of hackers and other malicious actors as they seek to gain access to digital assets on these platforms.
This has led to growing calls for greater regulation and oversight of the digital currency industry to avoid similar situations in the future. The collapse of FTX has prompted renewed discussion on how to improve the security and stability of cryptocurrency exchanges.
More regulatory oversight and transparency could help prevent similar situations, ensuring investors’ assets are better protected.
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