Tyr Capital Partners, a Switzerland-based crypto hedge fund, finds itself in the crosshairs of Swiss prosecutors over allegations of criminal mismanagement due to its connections with the troubled FTX exchange.
The raid, conducted by Swiss prosecutors, follows concerns raised by investors in August 2023 regarding Tyr’s failure to adhere to internal risk limits concerning its exposure to FTX, as reported by the Financial Times citing legal documents filed in the Cayman Islands.
Legal action against Tyr Capital Partners was initiated by TGT, another hedge fund that had invested with Tyr. TGT aims to wind up the portfolio and gain control of remaining assets, which include a $22 million claim against FTX. Despite accusations, Tyr, managing assets worth $140 million, denies any wrongdoing.
TGT alleges that it had warned Tyr’s chief investment officer, Edouard Hindi, about FTX’s financial instability between Nov. 7 and Nov. 10, 2022, just days before the exchange collapsed. Tyr Capital Partners purportedly attempted to withdraw its assets from FTX on Nov. 11, the same day the exchange filed for bankruptcy, according to legal filings.
Furthermore, TGT filed a criminal complaint against Tyr with the Geneva prosecutor’s office in April 2023, citing suspicions of “criminal management” and requesting a “dawn raid” on the fund manager’s premises. A spokesperson for the Geneva prosecutor confirmed that the investigation is ongoing.
FTX made headlines in November 2022 when it filed for Chapter 11 bankruptcy, revealing an $8 billion deficit in its accounts, leading to its formal declaration of bankruptcy. Its founder, Sam Bankman-Fried, faces potential imprisonment of up to 100 years on multiple charges related to the exchange’s collapse.
