Tyr Capital Faces Investigation Over Alleged Mishandling of FTX Exposure

By: Eva Baxter

Swiss-based crypto hedge fund, Tyr Capital, faces scrutiny from Swiss authorities following allegations of disregarded risk warnings related to the FTX exchange. TGT, a significant client of Tyr Capital, filed accusations leading to an investigation into possible mismanagement of funds. These claims assert that the hedge fund did not heed to danger signals about the collapse awaiting FTX before it happened in November 2022.

As covered by the Financial Times, court documents reveal TGT expressed concerns about Tyr's exposure to the destined-to-fail FTX. Despite these warnings, the hedge fund allegedly only tried to withdraw funds on November 11, the exact day FTX filed for bankruptcy.

In April 2023, TGT escalated the matter by lodging a criminal complaint against Tyr with the Geneva prosecutor's office. Suspicions of misconduct and a request for a search of Tyr's premises were cited.

An independent investigation into the fund's conduct was called for after allegations that Tyr had breached its risk mitigation measures, holding more than 15% of assets with a single counterparty, according to TGT.

While arbitration between Tyr and TGT continues, FTX's bankruptcy management has decided to liquidate assets to repay customers, using the digital asset values at the collapse time. However, this move has met resistance from some FTX creditors who seek additional legal actions.