Eighteen months after the crypto-focused algorithmic trading fund Galois Capital shut down, explaining that they had lost around $40 million in the FTX collapse, the SEC has filed a lawsuit against the firm for failing to properly custody their clients' funds. According to the SEC, instead of complying with SEC requirements that investment advisers hold assets with qualified custodians like banks, Galois was keeping assets on crypto exchanges including FTX.The SEC also charged that Galois Capital had misled some investors into believing they needed five business days of notice to redeem assets, while other investors were allowed to redeem assets more quickly.
Galois agreed to a settlement with the SEC in which they will pay a $225,000 penalty, which will go to investors who lost money.
