Prosecutors Raided High-Profile Crypto Hedge Fund Linked to FTX Dispute

Tyr Capital Partners, a crypto hedge fund based in Geneva, Switzerland, was raided by prosecutors after a criminal mismanagement complaint filed by investor TGT due to losses suffered after the collapse of crypto exchange FTX.

Swiss Prosecutors Raided FTX-Linked Tyr Capital Partners

One of the highest-profile crypto hedge funds, Tyr Capital Partners, was investigated by prosecutors in August last year, reported FT on February 20. TGT, a fund that invested with Tyr Capital Partners, accused Tyr of criminal mismanagement as it ignored an internal risk limit and investor warnings over exposure to FTX.

The collapse of FTX caused many firms to fall as new information continued to come into light during multiple FTX and Sam Bankman-Fried lawsuits, as well as FTX bankruptcy proceedings.

TGT claimed it raised concerns regarding FTX’s financial health between November 7 and 10 2022. However, Tyr Capital Partners chief investment officer Edouard Hindi ignored their concerns and only tried to withdraw its assets from FTX. TGT requested a “dawn raid” on the fund manager’s offices. TGT currently working to wind up the portfolio and control remaining assets.

“Given there are ongoing investigations as a result of these false claims, we cannot comment in detail as we refuse to prejudice those investigations. There is no valid legal claim that can be asserted as company complied with its regulatory and contractual obligations,” said Tyr Capital Partners.

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Dispute Prolongs as Tyr Refuses Arguments

TGT also argued that Tyr violated an internal risk requirement that limits exposure to any single counterparty to 15 percent of assets. Tyr told the prosecutor that an independent committee didn’t find any internal rules breach, according to the filing.

FT reported that a portfolio containing TGT’s remaining assets suffered an 84 percent loss between January and October last year.

Meanwhile, FTX’s administrators have failed to revive the defunct exchange and selling assets including BTC holdings in GBTC to pay back creditors.

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