American securities regulatory body fines $225k against crypto advisory firm Galois Capital Management LLC

Galois Capital Management LLC has been sued by the American securities regulatory body over failing to comply with customer asset protection regulations and misleading investors about redemption notice periods.

Galois Capital Management LLC is a hedge fund specialising in cryptocurrency and digital assets. Known for its focus on quantitative trading strategies, the firm actively engages in market-making, arbitrage, and other trading techniques within the crypto market. Galois Capital is recognized for its deep expertise in blockchain technology and for navigating the complex and often volatile cryptocurrency landscape.

On September 3, 2024, the SEC announced the agency fined Galois Capital Management LLC $225,000 for not following rules on protecting customer assets and for misleading investors about how long it takes to withdraw funds. Galois had put some of its assets into FTX, a crypto exchange which collapsed badly in 2022, and other institutions, leading to a loss of about half of its managed assets in November 2022.

SEC vs Crypto

However, all crypto enthusiasts know very well that the US SEC body is a strong critic of cryptocurrencies. Under the leadership of SEC Chairman Gary Gensler, the SEC tries to keep American citizens aware of crypto scams from time to time.

According to the SEC, all cryptocurrencies are the same as traditional stock assets, except that cryptocurrencies use different backend technology. The SEC believes this difference is not enough to distinguish crypto assets from stock assets fundamentally.

Last weekend, the SEC suggested that people stay away from any investment schemes related to cryptocurrencies, citing high risks and potential scams.

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