December 3, 2022

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Hedge fund Galois Capital says half of its capital is stuck on the FTX-FT exchange

Hedge fund Galois Capital says half of its capital is stuck on the FTX-FT exchange

(Reuters) – Galwa Capital is the latest hedge fund caught by surprise after nearly half of its assets were trapped in collapsed crypto exchange FTX, the Financial Times said on Saturday, estimating the sum at nearly $100 million.

Galois co-founder Kevin Zhou has written to investors in recent days that while the fund has been able to withdraw some funds from the exchange, “nearly half of our capital is still stuck in FTX,” the newspaper reported, citing a letter by Wright.

“I am deeply sorry that we found ourselves in this current situation,” Chu wrote, according to the report, adding that it could take “a few years” to recover a “percentage” of its assets.

FTX filed for bankruptcy proceedings in the United States on Friday and CEO Sam Bankman-Fried resigned after the group’s rapid liquidity crunch left FTX scrambling to raise about $9.4 billion from investors and competitors.

FTX’s rapid retreat from grace came after intense speculation about its financial health that led to $6 billion in withdrawals in just 72 hours earlier this week. The company had published a $32 billion valuation as recently as January.

FTX and Galois did not immediately respond to Reuters requests for comment.

Additional reporting by Akriti Sharma in Bengaluru; Editing by Clarence Fernandez and Stephen Coates

Our criteria: Thomson Reuters Trust Principles.

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