• Galois Capital told investors it has stopped all trading operations, and plans to return the remaining funds, the Financial Times said.

• The crypto-focused hedge fund's decision to shut down comes after half of its assets were trapped in the now-bankrupt FTX.

• FTX said last month that it had recovered more than $5 billion that could be used to repay creditors.

Cryptocurrency hedge fund Galois Capital is shutting down after half of its assets got stuck in the bankrupt exchange FTX, according to a report by the Financial Times.

The firm told investors that it had stopped all trading operations and exited all of its positions because it is no longer viable, the FT reported. Galois plans to return the remaining funds to investors.

"Given the severity of the FTX situation, we do not think it is tenable to continue operating the fund both financially and culturally," co-founder Kevin Zhou wrote in a letter to investors seen by the FT. "Once again I'm terribly sorry about the current situation we find ourselves in."

The crypto-focused investment firm became one of the high-profile victims of FTX's implosion, when half of the $200 million dollars worth of assets it managed last year were left trapped on exchange when it collapsed.

The fund plans to give back to its customers 90% of the money that isn't stuck at FTX, with the remaining 10% put on a temporary hold until all discussions are finalized. The FT also reported that Galois had sold its bankruptcy claims at 16 cents on the dollar.

Zhou confirmed the FT report that the flagship fund is shutting down, via a post on the firm's Twitter page on Monday.

"In spite of that, I am proud to say that although we lost almost half our assets to the FTX disaster and then sold the claim for cents on the dollar, we are among the few who are closing shop with an inception-to-date performance which is still positive," the tweet said.

Last month, FTX said it had recovered more than $5 billion in assets that could be used to repay creditors, a figure higher than the initial $1 billion-plus assets executives said they had tracked down in December.

When the crypto exchange collapsed in November, a bankruptcy filing showed that it owed nearly $3 billion to 50 of its largest creditors — all of whom were customers.

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