Hedge fund Galois Capital, one of the victims of the FTX crash, gave up after half of its holdings were trapped on the bankrupt exchange. The fund finally decided to close and return the remaining assets to investors.
On November 12, 2022, the hedge fund admitted in an announcement from its official Twitter account that it has significant influence on the FTX exchange.
For the record: yes, we did have significant funds stuck on FTX. No, we have not used any Bahamian withdrawal methods.
— Galois Capital (@Galois_Capital) November 11, 2022
According to According to the Financial Times, the fund told investors in a letter that all trading had been halted and the fund reduced its positions. Kevin Zhou, co-founder of Galois Capital, apologized to his investors and pointed out that the severity of the FTX situation made it impossible for them to justify continuing their operations.
In addition, the hedge fund said that investors will receive 90% of free funds that are not trapped on the FTX exchange. The remaining 10% will be temporarily kept by the company until negotiations are completed.
Apart from this, Zhou also expressed his intention to sell the hedge fund’s claims instead of waiting for a lengthy bankruptcy process that could take a decade. According to the co-founder of Galois Capital, buyers of these claims have more options to file claims in bankruptcy courts.
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The FTX bankruptcy froze millions of company funds, including firms such as New Huo Technology and Nestcoin. Galois Capital is also one of the many victims of the FTX fiasco, with at least $50 million stuck on the exchange.
Meanwhile, similar to Galois Capital’s approach, the largest lender, Mt.Gox, has also opted for an early payment option instead of waiting for a lengthy litigation that could take years. On Feb. 17, investment fund Mt.Gox said it had decided to pay in September rather than wait longer to get its assets back.
Credit : cointelegraph.com
