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FTX in Bankruptcy and Criminal Allegations: The Legal Drama Surrounding Tyr Capital

Tyr Capital Investigated for Ignoring FTX Warnings

TL;DR

  • Tyr Capital faces accusations of ignoring warnings about the collapse of FTX, a major cryptocurrency exchange.
  • The Swiss hedge fund is under investigation by prosecutors following a complaint of mismanagement filed by an investor.
  • FTX, after filing for bankruptcy, plans to fully refund its former customers, although it has ruled out restarting operations.

Swiss-based cryptocurrency hedge fund Tyr Capital is in the midst of allegations of mismanagement by an investor stemming from the collapse of FTX, which has resulted in an investigation by Swiss prosecutors.

According to recent reports, the investor alleges that Tyr Capital ignored warnings about the collapse of cryptocurrency exchange FTX.

According to legal documents filed in the Cayman Islands, Tyr is alleged to have failed to take into account warnings from the TGT fund, which had invested with Tyr, about the risk exposure associated with FTX.

Surprisingly, only after FTX filed for bankruptcy in November 2022 did Tyr attempt to withdraw its assets from the exchange.

TGT, led by Yield App co-founders Justin Wright and Jason Corbett, has filed efforts to liquidate its portfolio and reclaim its assets, including a $22 million lawsuit against FTX.

The situation has escalated, as in April 2023, TGT filed a criminal complaint against Tyr for alleged criminal mismanagement.

This action led to a search of Tyr’s office and the seizure of documents by Swiss prosecutors in August.

FTX in Bankruptcy and Criminal Allegations: The Legal Drama Surrounding Tyr Capital

Meanwhile, Tyr has chosen not to comment in detail on the ongoing investigations.

FTX, following its bankruptcy filing in November 2022, has announced plans to refund its former customers in full

However, the company has ruled out any attempt to restart the exchange.

According to an attorney for FTX, the full refund will be based on the claims values ​​on the date of the bankruptcy filing, reflecting the drastic decline in value of many coins in the lead-up period.

This case raises serious concerns about the management of cryptocurrency funds and the liability of fund managers regarding information and warnings received from investors.

Furthermore, it highlights the importance of due diligence by investors when selecting investment funds and the need for effective regulatory oversight in the cryptocurrency sector to protect investor interests and maintain market integrity.

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