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Kevin Zhou, Galois’s co-founder, claims the fund is no longer functional and has stopped all trading as it is not viable post-FTX.

After half of its assets were stuck on the defunct cryptocurrency exchange FTX, hedge fund Galois became one of the most well-known victims of the FTX debacle. The fund has now opted to shut down and restore its investors’ remaining funds.

According to Financial Times, Galois Capital, one of the largest quantitative funds specializing in cryptos last year and managing about $200 million in assets, informed investors that it had stopped all trading and unwound all of its positions because it was no longer viable.

The hedge fund, which had 50% of its assets locked on the collapsed crypto exchange, became one of the most well-known casualties of the FTX fiasco. Galois has decided to close and return the money to its investors.

Hedge funds were left with billions of dollars stuck on the exchange, which many had seen as one of the more trustworthy trading platforms in an industry that was sometimes loosely regulated or unregulated, a situation similar to Lehman Brothers in 2008.

In FTX’s Delaware bankruptcy, there might be one million creditors. In October, its founder Sam Bankman-Fried, who has pleaded not guilty to the charges against him, will go on trial for fraud.

Galois stated in the letter that clients would receive 90% of the funds not stranded on FTX after closing the fund. The finalization of discussions with the administrators and auditor would be followed by a temporary hold on the remaining 10%.

Zhou also stated in the letter that, rather than enduring a protracted legal process, he would prefer to sell the fund’s claim on FTX. He claimed bankruptcy cases can extend for a decade or longer and that distressed claim buyers “have greater competence than us in pursuing claims in bankruptcy court.” After writing the letter, Galois sold its claim for about 16 cents on the dollar.

Ahead of its $40 billion collapse last year, Luna and the associated stablecoin terraUSD were criticized by Zhou, a former employee of the digital exchange Kraken before anyone else did. Being a market maker allowed Galois to profit insignificantly from the transactions of other investors, which was the primary mode of trading for the company.