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Galois Capital flagship fund to close after FTX losses
Global Banking & Finance Review®
Company
By Nell Mackenzie and Elizabeth Howcroft
LONDON (Reuters) -Galois Capital hedge fund founder Kevin Zhou said on Monday his flagship fund would close after “losing almost half” of the fund’s money when cryptocurrency exchange FTX collapsed.
Zhou’s statement, released on Twitter, confirmed a report in the Financial Times that the hedge fund had decided to close its main fund and return its money to investors.
FTX, once among the world’s top crypto exchanges, shook the sector in November by filing for bankruptcy, leaving an estimated nine million customers and investors facing billions of dollars in losses.
In his tweet, Zhou also said Galois Capital had lost almost half of its assets “to the FTX disaster”.
Zhou told the fund’s investors, according to the Financial Times report, that the money stuck in FTX was worth around half of the hedge fund’s $200 million in assets.
The newspaper report cited an investor letter which said the hedge fund was no longer viable, had stopped trading and exited its positions.
After rapid gains during the pandemic, the cryptocurrency market plunged in 2022 as rising interest rates and a series of high-profile collapses at crypto firms prompted investors to ditch risky assets.
The value of all cryptocurrencies is around $1.2 trillion, down from a peak of $3 trillion in November 2021, according to market tracker CoinGecko.
(Reporting by Nell Mackenzie and Elizabeth Howcroft; Editing by Dhara Ranasinghe and Mark Potter)
A hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, often employing complex strategies to maximize returns.
Cryptocurrency is a digital or virtual form of currency that uses cryptography for security, making it difficult to counterfeit. It operates on decentralized networks based on blockchain technology.
Blockchain is a distributed ledger technology that records transactions across many computers in a way that ensures the recorded transactions cannot be altered retroactively, providing transparency and security.
A financial crisis is a situation in which the value of financial institutions or assets drops rapidly, often leading to widespread economic disruption and loss of confidence in the financial system.
An investment is an asset or item acquired with the goal of generating income or appreciation. Investments can include stocks, bonds, real estate, and other financial instruments.
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