Bankrupt investment firm Galois Capital Management LLC has reached a settlement with the U.S. Securities and Exchange Commission (SEC) for defrauding investors after the collapse of the FTX derivatives exchange. The SEC accused the company of false information about investor relations and unfair redemption notice requirements for some investors. In addition, Galois Capital was fined $225,000 and its compensation was distributed to former customers. This incident marks the SEC's increased supervision of cryptocurrency companies.

Key Points

- Galois Capital's settlement with the SEC stems from its fraud against investors after the collapse of FTX.

- The SEC accused the company of providing false advance notice requirements when investors redeemed.

- Galois Capital must pay a civil penalty of $225,000, and the compensation will be distributed to its former customers.

- The company has lost $40 million due to the collapse of FTX and faces serious financial problems.

- The SEC made it clear that the crypto asset trading platform does not meet the standards of a qualified custodian.

- The settlement occurred after the SEC issued a Wells Notice to OpenSea, indicating increased supervision.

- Key industry players questioned the SEC’s approach to cryptocurrency rules, calling for clear standards.