Swiss crypto hedge fund Tyr Capital is battling fallout over its ties to the collapsed FTX exchange. One of Tyr’s clients, TGT, has accused the fund of “criminal” mismanagement and is taking legal action to cut ties and regain control of its remaining assets.
TGT asserts that Tyr drew funds from FTX on November 11, 2022, the day FTX filed for bankruptcy on several occasions after Tyr was repeatedly warned about FTX-related risks, which TGT started expressing in the days preceding the bankruptcy declaration.
The TGT also states that Tyr ignored the rule of internal risk set by the policy, which states that no more than 15% of assets can be exposed to a single party. Despite the warning signs, the client implies that Tyr Inc. had too much of its capital at FTX before its spectacular downfall.
The investment firm with ties to crypto platform Yield App has had Tyr Capital’s offices raided and is now working to close its account and regain control of holdings, including a $22 million claim against FTX.
Tyr Capital has denied TGT’s allegations, but the growing legal pressure highlights the ongoing fallout across the crypto industry following FTX’s chaotic failure. Investors big and small lost billions, with the exchange only able to refund pennies on the dollar.
Regulators worldwide carefully scrutinize crypto funds’ risk controls and connections to failed players like FTX. The costly Tyr Capital dispute shows heightened investor awareness around crypto exposures as the industry works to rebuild trust.
Also Read: Sullivan and Cromwell Faces Class-Action Over FTX Collapse
