A hedge fund that was one of the highest-profile victims of the FTX scandal when half its assets were trapped on the collapsed cryptocurrency exchange has decided to close and return its remaining money to investors. From a report: Galois Capital, which last year had been managing about $200mn in assets and was one of the biggest crypto-focused quantitative funds, told investors that it had halted all trading and unwound all its positions as it was no longer viable, according to documents seen by the Financial Times. “Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally,” wrote co-founder Kevin Zhou. “Once again I’m terribly sorry about the current situation we find ourselves in.”

The FT revealed in November that Galois, despite pulling out some money, still had about half its assets stuck on FTX when the exchange collapsed. In a situation reminiscent of Lehman Brothers in 2008, hedge funds were left with billions of dollars trapped on the exchange, with many having viewed it as one of the more reputable trading platforms in an often lightly regulated or unregulated industry. As many as 1mn creditors have been identified in FTX’s Delaware bankruptcy. Its founder, Sam Bankman-Fried, is due to face trial in October on fraud charges, to which he has pleaded not guilty. Since sending the letter, Galois has sold its claim for approximately 16 cents on the dollar.

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