Swiss authorities raided the offices of prominent crypto hedge fund Tyr Capital Partners, following a criminal mismanagement complaint filed by investor TGT. This action stems from alleged losses suffered by TGT due to Tyr’s heavy exposure to the now-collapsed FTX exchange.

Prosecutors began investigating Tyr Capital last August, according to a February 20th Financial Times report. TGT, an investor in the fund, accused Tyr of criminal mismanagement, claiming they ignored internal risk limits and investor warnings regarding their overexposure to FTX.

The domino effect of FTX’s collapse continues to impact various firms as details emerge in lawsuits and bankruptcy proceedings. TGT claims they raised concerns about FTX’s financial health in November 2022, but crypto hedge fund Tyr allegedly disregarded them and only attempted to withdraw assets after the exchange’s downfall. This prompted TGT to request a raid on Tyr’s offices. They are currently winding down their portfolio and managing the remaining assets.

Tyr maintains their innocence, citing ongoing investigations and refusing to comment further due to potential prejudice. They deny any legal basis for the accusations and assert compliance with all regulations.

The dispute intensifies as TGT alleges Asset management firm Tyr Capital Partners violated an internal risk policy limiting exposure to any single entity to 15% of assets. Tyr told prosecutors an independent committee found no breach, but a reported 84% loss in a TGT-linked portfolio raises questions about their risk management.

Meanwhile, FTX’s administrators struggle to revive the defunct exchange, selling assets like Bitcoin investment trusts to repay creditors. This saga highlights the inherent risks of cryptocurrency and the complex legal battles within the industry.

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