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

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit