Crypto hedge fund Tyr faces allegations of ignoring FTX risk warnings: FT

Switzerland-based crypto hedge fund Tyr Capital has been accused of mismanagement by an investor and searched by Swiss prosecutors after the investor alleged the firm to have ignored early warnings over the collapse of the FTX exchange, according to the Financial Times.

Tyr allegedly ignored warnings from TGT, a fund that invested with Tyr, regarding its exposure to FTX and only attempted to withdraw assets from FTX after the exchange filed for bankruptcy in November 2022, the Financial Times reported on Tuesday, citing legal documents filed in the Cayman Islands.

TGT claimed that it had warned Tyr about the risks associated with FTX between Nov. 7 and 10, 2022 — before the exchange collapsed. TGT — whose directors include Yield App Co-founders Justin Wright and Jason Corbett — is currently making efforts to wind down its portfolio and gain control of its assets, including a $22 million claim against FTX, according to the FT report.

Tyr did not immediately respond to The Block’s request for comment. Tyr said in the media report that it could not comment in detail given the ongoing investigations.

In April 2023, TGT filed a criminal complaint against Tyr with the Swiss prosecutor for criminal mismanagement. The prosecutor carried out a search at the fund manager’s office and seized documents in August — according to the FT article, which cited a source familiar with the matter.

FTX to repay in full 

FTX filed for bankruptcy in November 2022. FTX lawyer Andrew Dietderich told a judge last month that FTX plans to repay former customers in full but it has abandoned plans to restart the exchange. 

“That payment in full is based on the petition date values of those claims,” the lawyer added. “Many of those claims are premised upon currencies, which declined dramatically in value in that tumultuous period leading up to the petition date.”