Galois Capital announced it will shut down after losing a substantial portion of its capital following the collapse of Sam Bankman-Fried’s FTX, according to a Financial Times report citing co-founder Kevin Zhou’s letter to investors.

According to Zhou, the business is no longer tenable due to “the severity of the FTX situation."

The letter added that all trading has ceased, and the fund has reversed its holdings, with Galois reportedly selling its bankruptcy claims for approximately $0.16 on the dollar.

Investors will receive 90% of available funds not trapped on the defunct crypto exchange, with the remaining 10% to be temporarily held by Galois until discussions with the administrators and auditor are finalized.


“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, the former head of trading at Kraken, wrote on Monday.

Galois' trapped funds

Galois, a Texas-based crypto-focused quantitative fund with $200 million under management before the FTX collapse, said last November it had “significant exposure” to Bankman-Fried’s exchange, with the Financial Times reporting at the time the firm could have had around half of its funds trapped on the platform.

In a note to investors, Zhou said "this entire tragic saga” started with the implosion of Terra ecosystem in May 2022, continued to the Three Arrows Capital (3AC) bankruptcy, and ultimately to the FTX and Alameda failure “has certainly set the crypto space back significantly.”


“Although this is the end of an era for Galois, the work we have done together for the past few years has not been in vain. I can’t say more than this for now. Stay tuned,” Zhou added in his Twitter thread Monday.

"Crypto will endure,” he wrote, and “these setbacks are temporary and will come to pass.”

Stay on top of crypto news, get daily updates in your inbox.