Swiss Crypto Hedge Fund in Clash with Client over FTX Exposure: Report

Tyr Capital Companions, a crypto hedge fund based mostly in Switzerland, is going through accusations of mismanagement from an investor, in line with a Monetary Occasions report.

Swiss prosecutors have initiated a search of the agency following allegations that began in August 2023 that Tyr Capital disregarded early warnings concerning the collapse of the FTX alternate.

Tyr Capital Companions Faces Authorized Motion

The authorized allegations in opposition to Tyr Capital Companions have been initiated by a hedge fund, TGT, that invested with the corporate. TGT has alleged the previous negligence in addressing early warnings concerning the collapse of the FTX alternate, which has led Swiss prosecutors to analyze Tyr.

The plaintiff, TGT, is looking for to liquidate the portfolio and assume management of the remaining property held by Tyr, which notably features a $22 million declare in opposition to FTX. TGT claims to have cautioned Tyr’s chief funding officer, Edouard Hindi, concerning the monetary instability of FTX between November 7 and November 10, 2022, mere days earlier than the alternate’s collapse.

Nonetheless, Tyr Capital Companions purportedly initiated efforts to withdraw its property from FTX round November 11, coinciding with the day FTX filed for chapter, in line with authorized paperwork filed within the case.

TGT additional alleges that Tyr Capital Companions disregarded an inner threat mandate which stipulated that publicity to any single counterparty mustn’t exceed 15% of property. Nonetheless, Tyr countered this declare by informing the prosecutor that an impartial committee established by the fund concluded that it had not violated inner rules, as per the authorized submitting obtained by the Monetary Occasions.

Moreover, TGT reported an 84% loss in a portfolio containing its remaining property between January and October final yr. In response, Tyr mentioned that the loss was false and wholly disputed.

Regardless of these allegations, Tyr Capital Companions, managing property amounting to $140 million, has refuted any accusations of misconduct.

FTX Prospects Await Fund Reimbursement

Whereas FTX directors have deserted makes an attempt to revive the alternate, it anticipates that prospects’ funds can be reimbursed based mostly on the worth of their investments when FTX collapsed in November 2022. Throughout this time, cryptocurrencies resembling Bitcoin and Ethereum have been valued at lower than half of their present worth.

In the meantime, TGT had lodged one other grievance with the Geneva prosecutor’s workplace in April final yr, citing suspicions of “prison administration” and requesting a “daybreak raid” on Tyr’s workplaces.

The search, throughout which paperwork have been seized, occurred on August 17 final yr, with Hindi, Tyr’s chief funding officer, summoned to supply info to the prosecutor. The standing of the investigation stays ongoing, in line with a spokesperson for the Geneva prosecutor.