Crypto Fund Galois Winds Down After Losing 50% of Funds To FTX

Galois co-founder Kevin Zhou tweeted that despite losing funds on FTX, the firm still finished up with positive inception-to-date performance

article-image

Shutterstock.com/CryptoFX, modified by Blockworks

share

Crypto fund Galois Capital is closing down operations after losing more than half its assets to the demise of FTX.

“Yes, it is true that our flagship fund is shutting down,” the firm said in a Monday tweet.

Financial Times had just reported that Galois investors were informed of its impending closure, and that all trading and open positions would be wound down. 

Galois co-founder Kevin Zhou attributed the decision to losing a big chunk of its funds to the FTX debacle. He reportedly apologized to investors, saying that it wasn’t viable to continue Galois — both financially and culturally.

After FTX filed for bankruptcy in early November, Bloomberg reported that Galois had up to $45 million in exposure to the exchange; funds kept on the platform as it went dark. Galois specialized in over-the-counter trading and algorithmic market making.

Galois warned customers that FTX contagion would last at least until the end of the year. “Seriously, I didn’t see this coming. Didn’t see the [Three Arrows Capital] situation either. Lessons learned. Will try to do better,” Zhou tweeted in November as FTX went bust.

90% of the remaining assets that are still with Galois (not on FTX) will be returned to the fund’s clients. The remaining funds will temporarily be held until discussions with administrators and the auditors are complete, according to Financial Times.

Loading Tweet..

Zhou reportedly prefers that the trapped funds are claimed via FTX’s bankruptcy proceedings, rather than having to go through a complex legal process. Galois has sold its claim for about 16 cents on the dollar.

“I am proud to say that although we lost almost half our assets to the FTX disaster and then sold the claim for cents on the dollar, we are among the few who are closing shop with an inception-to-date performance which is still positive,” Zhou said.

Disgraced FTX CEO Sam Bankman-Fried has pleaded not guilty to eight criminal charges related to his role at the defunct platform, including fraud. His trial is scheduled for October this year.

Galois Capital was among a handful of crypto participants to publicly warn of Terra’s unsustainability before it imploded last year. 

In May 2022, Zhou told Bloomberg that he began to worry about Terra’s “systemic risk” to the entire industry, frequently tweeting about it as a “public service to also let everybody else know too.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

The $135 million raise shows that TradFi giants are serious about crypto adoption

article-image

The banking system still processes payments like it’s 1975. Crypto might have a fix.

article-image

Fiserv’s launch follows Senate passage of the GENIUS Act for stablecoin regulation.

article-image

Bitcoin is emerging as “the new standard for long-term corporate resilience,” Swan Bitcoin CIO says

article-image

Cybersecurity experts explain how the attack could have been prevented