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FTX Crash Triggers Criminal Probe Of Prominent Crypto Hedge Fund Tyr Capital

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A Swiss prosecutor has initiated a criminal investigation against Tyr Capital for allegedly mishandling its exposure towards FTX, a failed cryptocurrency exchange. The case emanates from the lawsuit that TGT—an investor in Tyr’s fund—filed against it in the Cayman Islands, where Tyr is domiciled. The lawsuit by TGT alleges Beginners contravened internal risk limits and ignored warnings about FTX exchange.

TGT is trying to liquidate Tyr’s fund and recover its remaining assets, including a $22 million claim against FTX; TGT invests through Yield App, among other companies that pool capital into the crypto market. According to TGT, Tyr tried to take out its money from FTX on the day of bankruptcy, and afterward, it lost much value.

Tyr, founded by former Deutsche Bank and Société Générale traders Edouard Hindi and Olivier Trombert, has denied all accusations while stressing that it has always been acting in the best interests of its investors. The company Tyr, which owns close to $140m assets under its management, is among the few profitable cryptocurrency hedge funds that have managed to exploit arbitrage opportunities available in this highly volatile market.

Before FTX shut down, Tyr spoke with its founder, Sam Bankman-Fried, about concerns it had over bankruptcy and liquidity of the exchange, adding that they tried to get their money out as soon as possible. According to Tyr, they have completely collaborated with Swiss regulators and will be exonerated.

Last year in April, TGT also filed a criminal accusation against Tyr with the prosecutor in Geneva, underlining “the crime of the criminal management.” It was alleged that there should be a dawn raid on Tyr’s offices. The person familiar with the matter said that on August 17 last year, searches were conducted by the prosecutor, and documents were seized.

FTX Customers Await Compensation

FTX, which was once the largest cryptocurrency exchange, filed for bankruptcy in November 2022 after suffering from considerable damages during the market crash and being repeatedly attacked by hackers. FTX’s clients like Tyr will be refunded depending on the value of their investments at the time of its collapse when bitcoin and ether had lost more than half of their then-present values.

Since then, FTX’s administrators have decided not to restore the exchange because it is not legally possible or technically difficult. Because of this failure, Bankman-Fried, who also founded another crypto exchange called FTX.com, apologized for the collapse of FTX and stated his readiness to offer help to affected customers in any way he could.

The recent cases of Tyr and FTX illustrate that the crypto industry is still largely unregulated with its inherent risks and challenges, such as volatility and fraud. The sector’s expansion has necessitated greater openness on the part of cryptocurrency exchanges and fund management companies, which have caught the attention of investors, including oversight agencies.

Related Reading | Filecoin (FIL) Soars 37%: Breakout Above $8.50 Resistance Could Triple Price, Analysts Say

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Written by BTC Artist

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