Following the FTX saga, certain hedge funds shut down their operations. In contrast, others persevered and managed to stay afloat by successfully navigating the difficulties of FTX’s bankruptcy filing.
CoinShares Survives FTX Exposure
CoinShares, an institutional cryptocurrency fund manager, has released its fourth-quarter report for 2022. In the statement, the fund manager emphasized that the firm had maintained its financial stability, despite contending with the FTX collapse towards the end of 2022.
Additionally, the fund highlighted its successes, including its inclusion on the primary market of Nasdaq Stockholm, as well as the significant levels of inflow it experienced concerning CoinShares’ physical exchange-traded products.
CoinShares disclosed that it had over $31 million in assets trapped in the FTX exchange after the exchange declared bankruptcy. The fund manager expressed uncertainty regarding the possibility of recovering these funds or how much it can recuperate its assets.
In addition, during the quarter, the company closed its CoinShares consumer platform. The firm stated, “market conditions created a scenario that prevented us, with our current capital structure, from supporting consumer activity that necessitated substantial upfront marketing investment.”
Meanwhile, Jean-Marie Mognetti, the CEO of CoinShares, stated that FTX’s bankruptcy substantially impacted the company’s ability to introduce its algorithmic trading initiative, HAL, in Europe.
Mognetti Outlines CoinShares Plan For 2023
Nonetheless, Mognetti also conveyed the company’s plans for 2023. This included clear objectives such as expanding its institutional offerings and crypto management business.
Although CoinShares could withstand the FTX debacle, other entities had to shut down operations. Among them is Galois Capital, a hedge fund company.
Earlier this week, the fund informed its investors that it would be closing down its operations due to the losses it suffered due to the FTX collapse. The firm chose to return its remaining funds to its investors and sell off its claims to those who could pursue bankruptcy claims.
Galois Capital plans to distribute 90% of the funds currently available back to its investors while temporarily retaining the 10% remaining. Using a Twitter thread, the hedge fund acknowledged its substantial exposure to the now-bankrupt FTX exchange.