Galois Capital, the crypto hedge fund that famously warned of the dangers around Terra’s LUNA and UST ahead of their 2022 collapse, has been charged by the U.S. Securities and Exchange Commission for misleading investors and for not properly safeguarding customer funds.
The firm, which shut down in early 2023 after being impacted by the downfall of crypto exchange FTX, has settled the charges and will pay the regulator a civil penalty of $225,000, which will be distributed to users. Galois lost $40 million amid the shuttering of FTX, and in the announcement, the SEC specifically calls out the firm for using FTX to hold customer assets.
“According to the order, Galois Capital held certain crypto assets in online trading accounts on crypto asset trading platforms, including FTX Trading Ltd., that were not qualified custodians,” the press release reads.
Editor’s note: This story is breaking and will be updated with additional details.
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Source: https://decrypt.co/247618/terra-linked-galois-capital-lost-40-million-ftx-sec-fine
