Prominent Swiss crypto hedge fund Tyr Capital Partners is under scrutiny following allegations of “criminal” mismanagement and a subsequent raid by Swiss authorities over losses linked to the defunct exchange FTX.
The Geneva-based firm reportedly ignored internal risk thresholds and investor warnings regarding its significant exposure to FTX, according to legal documents filed by an investor in the Cayman Islands, as reported by the Financial Times.
The legal action stems from a fund called TGT, which collaborated with Tyr. TGT is seeking to liquidate its portfolio and take control of remaining assets, including pursuing a $22 million claim against FTX. The report states that TGT manages funds from various entities, including the crypto wealth platform Yield App.
Established in 2018, Tyr specializes in diversified investment services for high net-worth individuals, led by Edouard Hindi and Olivier Trombert, both veterans in the finance industry.
TGT accuses Tyr of breaching internal risk limits, alleging that the firm disregarded a threshold limiting exposure to any single entity to 15% of their assets. However, Tyr disputes this claim, stating that an independent committee found no violation of internal rules.
Legal documents reveal that the claim against FTX was transferred to a new fund. Additionally, a small portfolio containing TGT’s remaining assets reportedly experienced an 84% decline in value between January and October the previous year.
Tyr has denied the allegations brought by TGT and did not respond to requests for comment by press time.
Concerns about FTX’s financial stability were reportedly raised to Hindi between Nov. 7 and Nov. 10, 2022, just before FTX filed for bankruptcy on Nov. 11.
In April 2023, TGT filed a criminal complaint against Tyr with the Geneva prosecutor, alleging “criminal mismanagement” and seeking a “dawn raid” on the fund manager’s offices. A search warrant executed on Aug. 17 last year resulted in document seizure from Tyr.
TGT director Justin Wright stated that the fund is currently undergoing a legal wind-up process through the courts of the Cayman Islands.
