CoinShares Is Still Afloat Despite Heavy FTX Losses – Q4 Report

While most of the other hedge funds decided to shut down their operations after they were hit by the FTX saga, some of them managed to survive and remain afloat after they navigated the murky waters and challenges brought about by the collapse of the exchange.

In the Q4 2022 report, institutional crypto fund manager CoinShares highlighted the company remained “financially robust” despite having to deal with the FTX implosion at the end of last year. The fund also presented its wins, including its graduation to NASDAQ Stockholm’s primary market and strong levels of inflow into the CoinShares physical exchange-traded products.

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— CoinShares (@CoinSharesCo) February 21, 2023

CoinShares confirmed that more than $31 million of assets got stuck in the FTX crypto exchange after its bankruptcy declaration. The fund manager remains uncertain whether they will ever manage to recover the lost funds or how much of these assets can be recovered.

During the last quarter of the year, the company also made the decision to shut down its CoinShares consumer platform. The company wrote:

“Market conditions gave rise to a situation that did not allow us, with our existing capital structure, to support a consumer activity that required significant upfront investment in marketing.”

The CEO of CoinShares, Jean-Marie Mognetti, said that the FTX bankruptcy “had a significant impact” on the company’s capacity to deploy its algorithmic trading platform HAL within Europe.

Despite that, Mognetti also said that the company would move into 2023 with clear goals, such as focusing on expanding its digital asset management business together with institutional offerings.

While CoinShares managed to survive the FTX storm, hedge fund Galois Capital was not as lucky. On February 20, the fund told users and investors that it was shutting down its operations due to the losses incurred by the FTX collapse. The company decided to give back its remaining funds to its investors and sell off its claims to buyers more capable of pursuing bankruptcy claims.