CoinShares remains afloat despite heavy FTX losses: Q4 report

While other hedge funds chose to shut down operations after the FTX fiasco, some managed to survive and stay afloat after overcoming the challenges caused by the crash.

In his report for the fourth quarter of 2022, the manager of the institutional cryptocurrency fund CoinShares dedicated the firm remained “financially strong” despite facing the collapse of FTX at the end of the year. The fund also presented its achievements, such as entering the Nasdaq Stockholm primary market and the high level of inflows into CoinShares physical exchange products.

CoinShares said more than $31 million worth of assets were stuck on the FTX exchange after filing for bankruptcy. The fund manager is still not sure if they will ever be able to return the funds or how much of the assets can be returned.

During the quarter, the firm also made the decision to wind down its consumer platform CoinShares. The firm wrote:

“Market conditions resulted in a situation that prevented us, with our existing capital structure, from sustaining consumer activity that required a significant upfront investment in marketing.”

CoinShares CEO Jean-Marie Mognetti also wrote that the FTX bankruptcy “had a significant impact” on the firm’s ability to roll out its HAL algorithmic trading platform in Europe. Regardless, Mognetti also wrote that the firm will transition in 2023 with clear goals such as focusing on expanding its digital asset management business and institutional offerings.

US Regulatory Action Leads to $32M Digital Asset Outflow: CoinShares

While CoinShares managed to weather the FTX storm, hedge fund Galois Capital was less fortunate. On February 20, the fund informed investors that it was going out of business due to losses incurred as a result of the collapse of FTX. The firm decided to return the remaining funds to its investors and sell its claims to buyers better able to file for bankruptcy.

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