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, modified by Blockworks


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.”

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. What you can expect: And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided. Join us and help shape the future of our […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


Certain creditors could be repaid sooner, with one hedge fund exec telling Blockworks it expects a payout by the end of the year


Busan is South Korea’s second largest city with a population around 3.4 million


Cyprus granted eToro crypto registration, setting the groundwork for the company to operate crypto services post-MiCa rollout



These are the best tools and practices you can leverage to defend against crypto market volatility


The agency alleges around 1,160 customers used the margin product, losing about $8.35 million since Oct. 2021.


On Thursday, the Securities and Futures Commission issued a statement disavowing any communication with JPEX saying that the platform is unlicensed