SEC accuses Galois Capital of improperly storing client crypto assets
The company agreed to pay a fine to settle the claims
04.09.2024 - 08:40
137
2 min
0
What’s new? The US Securities and Exchange Commission (SEC) has accused Florida-based crypto investment company Galois Capital Management, formerly licensed as an investment adviser, of violating client asset protection requirements and selling unregistered securities. To settle the claims, the company agreed to pay $225 000, which will be distributed to the affected clients.
What else is known? Galois Capital failed to transfer assets under the management of a private fund to a qualified custodian, a violation of the custody rule in the Investment Advisers Act. The violation lasted from July 2022.
Instead, the company held client assets in the accounts of crypto exchanges that do not qualify as qualified custodians. One such platform was FTX, which went bankrupt in November 2022 as a result of a multi-billion dollar fraud by its top management.
Consequently, approximately half of the assets of the fund managed by Galois Capital were lost following the collapse of FTX.
In addition, Galois Capital misled some investors by claiming that they could only withdraw their money from the fund by giving at least five business days’ notice before the end of the month. Payments to other clients were made in shorter timeframes.
Crypto lender Arba will pay a fine to settle SEC claims
The commission accused the company of unregistered securities offering
The SEC explained that Galois Capital, by failing to comply with securities custody rules, exposed investors’ assets to misappropriation, misuse, and loss.
Although the company agreed to pay a fine to be distributed to clients, it neither admitted nor denied the regulator’s allegations.
Useful material?
Telegram 
Twitter Market
The company’s unrealized profits from investing in its first cryptocurrency approached $14 billion
Nov 19, 2024
Incidents
The search, the reason for which was not announced, took place a week after the election, the results of which Polymarket users predicted quite accurately
Nov 14, 2024
Market
Analysts point to the growing popularity of the first cryptocurrency as a safe haven asset
Nov 13, 2024
Market
The product will begin trading on the Swiss Exchange on November 19
Nov 12, 2024
Market
The company’s unrealized profits from investing in the first cryptocurrency approached $13 billion
Nov 12, 2024
Market
The company predicts that the rate of the first cryptocurrency will grow to $200 000 by the end of next year
Nov 11, 2024
Cryptocurrency rates
-
Bitcoin
$98 654
BTC
+0.52%
-
Ethereum
$3 333.06
ETH
+5.94%
-
BNB Smart Chain
$579.4
BSC
+1.23%
-
Ripple
$1.41
XRP
+26.12%
-
Dogecoin
$0.387841
DOGE
+1.49%
-
Cardano
$0.865878
ADA
+9.88%
-
Bitcoin Cash
$486.89
BCH
-6.72%
-
Polkadot
$6.06
DOT
+7.76%
-
Stellar XLM
$0.286668
XLM
+20.31%
-
Litecoin
$89.81
LTC
-0.15%