KEY POINTS
- Investor TGT said it warned Tyr of FTX's financial health in the days leading to the exchange's collapse in 2022
- The hedge fund denied the claims, but its offices were raided in August and documents were reportedly seized
- TGT has a $22 million claim against FTX and is looking to close its Tyr account
Swiss cryptocurrency hedge fund Tyr Capital has reportedly been alleged by an investor of ignoring investor warnings over its exposure to Sam Bankman-Fried's collapsed exchange, FTX.
TGT, a fund that invested with Geneva-based Tyr Capital Partners, alleged in legal documents filed in the Cayman Islands that Tyr ignored an internal risk limit and investor warnings regarding FTX, the Financial Times reported Tuesday.
In the filing viewed by FT, TGT claimed that it raised concerns with the crypto hedge fund's chief investment officer, Edouard Hindi, regarding FTX's financial health between Nov. 7 and Nov.10, 2022. However, Tyr only attempted to withdraw its assets from the fallen exchange around Nov. 11, the day FTX filed for Chapter 11 bankruptcy.
In April, TGT filed a criminal complaint with Geneva's prosecutor, alleging "criminal offense of criminal management" against Tyr. The investor also requested a "dawn raid" on Tyr's fund manager's offices, which was conducted in mid-August, the outlet reported, citing a person familiar with the details of the raid. The prosecutor reportedly seized documents during the raid.
Tyr said in a statement that it cannot comment in detail considering ongoing investigations "as a result of these false claims."
News of Tyr Capital's legal battle came a few weeks after the bankrupt exchange revealed that it has abandoned plans to relaunch and will instead liquidate all of its assets so it can repay customers. The crypto exchange expects to repay all affected customers in full but it has yet to calculate repayments based on crypto prices from November 2022.
TGT, on the other hand, looks to close its Tyr account and recover remaining assets, including a $22 million claim against Bankman-Fried's FTX.
Tyr isn't the only crypto firm that has been dragged down by its exposure to FTX as several other companies linked to the collapsed exchange have since filed for bankruptcy or have filed claims with FTX.
Bankrupt crypto lender BlockFi has said that while customers have moved a step closer to recovering some of their assets, the repayment amount will largely rely on the amount it can claw back from FTX and the exchange's sister company, Alameda Research, which has also filed for bankruptcy.
Crypto lender Genesis Global Capital, on the other hand, filed a claim of $226.3 million against FTX, while the exchange said Genesis owed it $4 billion. Genesis denied the said claim, but the two defunct firms have since reached an agreement in principle to resolve their rival claims.
