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Swiss Authorities Raid Crypto Hedge Fund Amid FTX Mismanagement

 |  February 20, 2024

Geneva-based Tyr Capital Partners, a prominent hedge fund firm in the cryptocurrency industry, finds itself under scrutiny as Swiss prosecutors have launched a raid amidst accusations of “criminal” mismanagement. The allegations stem from a dispute with an investor over losses incurred following the collapse of the crypto exchange FTX.

According to legal documents filed in the Cayman Islands by an investor, Tyr Capital Partners is accused of disregarding internal risk limits and ignoring warnings from investors regarding its exposure to FTX. The investor, identified as TGT, has initiated legal action in an attempt to wind up the portfolio and take control of remaining assets, including a $22 million claim against FTX. Notably, TGT represents funds from various companies, including crypto wealth platform Yield, reported The Financial Times.

Tyr Capital Partners, led by Edouard Hindi, former head of Deutsche Bank’s energy proprietary trading, and Olivier Trombert, former head of Société Générale’s energy options desk, has denied the allegations brought forth by TGT. The hedge fund, managing approximately $140 million in assets, has been regarded as a success story within the crypto sector, despite recent closures of other notable firms like Three Arrows Capital and Galois Capital. Tyr Capital Partners has capitalized on trading discrepancies in token prices, particularly in bitcoin and ether.

Read more: FTX, Congress, Stablecoins: What 2023 May Bring For Crypto Regulations

The filing by TGT claims that concerns were raised with Tyr’s chief investment officer, Hindi, regarding FTX’s financial stability between November 7 and 10, 2022, just days before the exchange’s collapse. However, Tyr only attempted to withdraw its assets from FTX on November 11, the same day the exchange filed for bankruptcy, as per the filing.

FTX’s administrators have since abandoned plans to revive the defunct exchange. Customers are anticipated to be reimbursed based on the value of their investments at the time of FTX’s collapse, during which cryptocurrencies like bitcoin and ether were valued at less than half of their current prices.

Source: FT