Galois co-founder Kevin Zhou wrote to investors in recent days, in a letter seen by the Financial Times, that while the fund was able to pull some money out of the stock market, it still had “about half of our capital stuck in FTX”. . Based on Galois’ assets under management in June, that could amount to around $100 million. “I deeply regret that we are in this current situation,” Zhou wrote. “We will work tirelessly to maximize our chances of recovering the stuck capital by any means necessary.” She added that it may take “a few years” to recover “some percentage” of her assets. FTX announced on Friday that Sam Bankman-Fried has stepped down as chief executive after failing in a last-ditch effort to secure a rescue package. It follows a tumultuous week in which the stock market admitted it was unable to meet customer withdrawal demands without outside capital, raising fears that customers could face heavy losses. FTX’s Chapter 11 bankruptcy filing in federal court in Delaware includes FTX’s U.S. entity, Bankman-Fried’s proprietary Alameda Research trading group and about 130 affiliated companies. His empire was valued at $32 billion just months ago. Industry insiders say the fact that FTX was used by so many hedge funds and was considered one of the safest places to trade cryptocurrencies in the world means that many managers may have money stuck in the exchange. Galois did not immediately respond to a request for comment. Galois is one of the industry’s largest crypto-focused quant funds and, as of this summer, had more than $200 million in assets under management. A significant part of her trading activity is as a market maker, allowing her to make small profits from the trades of other investors. Zhou, who worked at digital exchange Kraken before founding Galois, is known for his early criticism of cryptocurrency luna and related stablecoin terraUSD in the run-up to its $40 billion collapse in May. Recommended He said in the letter that his fund had stayed with the money in FTX because it had “a ton of open positions” that needed to be closed and because of “underestimating the solvency risk of keeping our funds in FTX.” He added that if FTX filed for bankruptcy, then Galois would become a creditor. If that happens, then “I expect we will recover some percentage of our FTX assets within a few years,” he said. [email protected]
