Wu said that he learned that the U.S. Securities and Exchange Commission (SEC) announced a civil penalty of $225,000 against Galois Capital Management LLC, a crypto asset investment advisory company. The SEC accused the company of failing to comply with customer asset protection regulations and misleading investors about redemption notice periods. The SEC investigation found that since July 2022, Galois Capital has failed to ensure that certain crypto assets held by the private equity funds it manages are kept by qualified custodians, in violation of the custody rules of the Investment Advisers Act. The company stored some of its assets on trading platforms of non-qualified custodians, including FTX, resulting in the loss of about half of its managed assets when FTX collapsed in November 2022. In addition, Galois Capital told some investors that redemptions required five business days' notice in advance, but actually allowed other investors to redeem in a shorter time, which constituted misleading behavior.

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