February 20, 2024 at 11:08 GMTModified date: February 20, 2024 at 11:08 GMT
February 20, 2024 at 11:08 GMT

Crypto hedge fund raided after accusations of ‘criminal’ mismanagement

Tyr was raided and is facing criminal allegations after it allegedly ignored warnings of its FTX exposure from one of its investors.

Crypto hedge fund raided after accusations of ‘criminal’ mismanagement

Tyr, one of the industry’s well-known hedge fund firms, is facing allegations of “criminal” mismanagement. Swiss prosecutors conducted a raid following a dispute with investor TGT over losses incurred due to the collapse of the crypto exchange FTX.

Tyr, led by Edouard Hindi and Olivier Trombert, allegedly ignored warnings from TGT about its exposure to FTX, according to a recent FT report that cited legal documents from the Cayman Islands.

However, Tyr strongly denies these allegations.

TGT’s accusation

TGT claims to have warned Tyr about the risks associated with FTX between 7 and 10 November, 2022, prior to the exchange’s collapse. However, legal documents filed in the Cayman Islands reveal that Tyr initiated the withdrawal of its assets from FTX only on 11 November, the day the exchange filed for bankruptcy.

TGT, in its official filing, accused the fund of serious lapses in integrity. They claim to have lost trust and confidence in the fund due to mismanagement and are now urging an independent investigation into the fund’s operations. The filing said: “There has been a serious and demonstrable lack of probity in the conduct of the fund’s affairs.”

TGT, currently in the process of winding down its portfolio, is making efforts to gain control of its assets, including a $22 million claim against FTX. 

TGT filed a criminal complaint against Tyr in April last year, alleging “the criminal offence of criminal management.” The Geneva prosecutor conducted a raid on 17 August, 2023, seizing documents. 

Hindi was summoned to appear before the prosecutor as a so-called person providing information, a status between a witness and being accused, according to the filing in the Cayman Islands. 

The procedure remains ongoing, according to a spokesperson for the Geneva prosecutor. Tyr, in response, stated that Hindi was not summoned but voluntarily requested a meeting with the prosecutor after the search. 

The firm refrained from providing detailed comments to the FT, citing ongoing investigations resulting from what they label as “false claims.”

Tyr, managing approximately $140 million in assets, has been considered a relative success in the crypto hedge fund sector. Despite the folding of other prominent players, such as Three Arrows Capital and Galois Capital, Tyr has navigated challenges and profited from trading discrepancies in token prices like Bitcoin ($BTC) and Ethereum ($ETH).

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