- Tyr Capital is about to face the music in court for its alleged exposure with the now-defunct FTX cryptocurrency exchange.
- The company was recently raided by a Swiss prosecutor over suspicion of “criminal mismanagement.”
- TGT brought about a legal complaint against the crypto sector’s highest-profile hedge fund manager.
Tyr Capital Sued by TGT
Tyr Capital is in a tight spot right now following a raid by Swiss authorities this Tuesday according to SWI. This was in connection to a complaint filed by TGT back in April 2023 at the Geneva prosecutor’s office.
The issue stems from the respondent’s failure to withdraw TGT’s assets when the latter repeatedly warned Tyr’s chief investment officer, Edouard Hindi, of financial trouble brewing within FTX between November 7 to 10, 2022. Allegedly, the Swiss hedge fund only took action by the time FTX went on a downward spiral on November 11, which was the same day the firm led by former CEO Sam Bankman-Fried (SBF) filed for bankruptcy.
TGT also accused Tyr of criminal mismanagement because it disregarded its internal risk requisite that limits its exposure to other parties by 15%. TGT is notably associated with the crypto platform Yield App and the co-founders of the same company are both serving as directors in the investment firm. Tyr, however, denied such allegations.
“The information made available to journalists is false and wholly disputed,” commented Tyr’s PR representative, Adam Wurf. “There is no valid legal claim that can be asserted by Yield App (TGT LP/GP) against the company.”
Tyr likewise denied TGT’s claim that they were alerted of FTX’s potential collapse.
TGT’s court filing seeks to close its account with Tyr and salvage its remaining assets. This also covers the recovery of a $22 million claim against FTX.
“The procedure is still ongoing,” said a spokesperson for the Geneva prosecutor assigned to the case.
Meanwhile, we are yet to hear the official statement of TGT to the press regarding the matter.
The FTX Debacle
Once among the biggest names in the cryptocurrency industry, SBF’s empire came crashing down in November 2022 when FTX’s $8 billion losses came to light, which consequently led to its Chapter 11 filing. The problems of the company were exposed following a Binance review for the supposed acquisition of its crypto exchange business.
The exchange led by then-CEO Changpeng Zhao eventually backed out from the deal after finding out discrepancies in the accounting books of FTX and due to the ongoing probe of US authorities for SBF and his cronies’ potential involvement in fraudulent activities.
The ensuing trial after the arrest of Bankman-Fried in the Bahamas and extradition to the US resulted in his conviction of seven counts of fraud. A sentencing scheduled on March 28 awaits the former billionaire with a potential 115 years of prison time awaiting him.
Some legal experts, however, believe that his penalty may be reduced to only 10 to 20 years because of the commonality of the charges. Others even expect less due to the apparent cooperation of FTX in repaying its disgruntled customers.