Galois Capital settles SEC charges related to FTX

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—by Protos Staff

Galois Capital Management, which famously shorted the Terra system before its collapse, has settled charges with the United States Securities and Exchange Commission (SEC) related to the fact that it held assets at failed cryptocurrency exchange FTX. 

Galois’ settlement does not involve it admitting the allegations contained in the SEC order. Specifically that Galois “held certain crypto assets that were offered and sold as securities” that “were not maintained with a qualified custodian.”

It’s not clear which crypto assets were considered securities by the SEC in this case. Galois ended up losing access to “approximately half of the fund’s assets under management” when FTX closed withdrawals. 

The SEC stated that this was in violation of the Investment Advisors Act.

Read more: Which FTX and Alameda executives are going to prison and when?

Additionally, it alleges that Galois allowed some investors to redeem more quickly than the length of time it told others it would take. 

Galois agreed to pay $225,000 in penalties to settle the charges. 

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