Galois Capital, one of the victims of the FTX collapse, has declared bankruptcy after half of its assets became locked in the bankrupt exchange. The hedge fund eventually chose to close and deliver its remaining assets to investors.
The hedge fund stated on November 12 via its official Twitter account that it has a large exposure to the FTX exchange.
According to the Financial Times, the fund has now informed investors in a letter that all trading has ceased and the firm has rolled back its positions. Kevin Zhou, the co-founder of Galois Capital, apologized to their investors and stated that the gravity of the FTX problem makes it impossible for them to continue operations.
Furthermore, the hedge fund stated that investors will receive 90% of accessible funds that are not trapped in the FTX market. The remaining 10% will be held by the corporation until the negotiations are completed.
Apart from that, Zhou stated that they would prefer to sell the hedge fund’s claims rather than go through a protracted bankruptcy procedure that may take a decade. Buyers of these claims, according to the Galois Capital co-founder, are better capable of pursuing claims in bankruptcy courts.
The FTX bankruptcy froze millions of dollars in corporate cash, including New Huo Technology and Nestcoin. Galois Capital is another casualty of the FTX disaster, with at least $50 million in cash trapped in the exchange.
Meanwhile, similar to Galois Capital, the largest Mt. Gox creditor has chosen an early settlement option rather than a lengthy judicial process that may take years. On February 17, Mt. Gox Investment Fund announced that it had chosen to be paid in September rather than wait longer for its funds to be returned.
