The Swiss crypto hedge fund Tyr Capital finds itself entangled in a contentious dispute with one of its clients, TGT, revolving around its association with the now-defunct digital assets exchange FTX, as detailed by the Financial Times.
In a dramatic turn of events, TGT has levied accusations of "criminal" mismanagement against Tyr, prompting a Swiss prosecutor to conduct a raid on Tyr's offices. The core of the dispute centers on allegations that Tyr withdrew funds from FTX on the very day it filed for bankruptcy, despite having received prior warnings. Additionally, TGT contends that Tyr disregarded an internal risk requirement, which stipulated a maximum exposure of 15% to any single entity.
The fallout from FTX's collapse in 2022, following a CoinDesk report revealing manipulative practices involving its native FTT token, has cast a shadow over the crypto industry. The downfall of FTX and its affiliated company, Alameda Research, led by Sam Bankman-Fried, triggered a series of bankruptcies and a prolonged market downturn.
TGT asserts that it had expressed concerns about FTX between November 7, 2022, and November 10, 2022. However, Tyr, under the leadership of former Deutsche Bank executive Edouard Hindi, purportedly withdrew assets from FTX only on the day the exchange filed for bankruptcy, according to court filings cited in the report.
Notably, TGT, which manages funds from various entities, including crypto platform Yield, contends that Tyr's actions violated internal risk management protocols.
Specifically, Tyr is alleged to have breached the stipulated limit of 15% exposure to any single party. In response, Tyr has refuted the claims made by TGT, setting the stage for a complex and contentious legal battle between the hedge fund and its disgruntled client. As the legal proceedings unfold, the outcome could have significant repercussions for both Tyr Capital and the broader crypto investment landscape.