See More

Hedge Fund Lands Into a $22 Million Legal Battle Over FTX Exposure

2 mins
Updated by Ali M.
Join our Trading Community on Telegram

In Brief

  • Tyr Capital sued over $22 million loss linked to FTX's collapse, by investor group TGT in Cayman Islands.
  • Legal claim alleges Tyr Capital ignored risks and delayed withdrawing assets until FTX's bankruptcy.
  • Tyr Capital denies allegations, citing commitment to legal obligations amidst ongoing investigations.
  • promo

Geneva-based Tyr Capital Partners faces a $22 million quandary tied to the collapse of the crypto exchange FTX. Legal action in the Cayman Islands, spearheaded by the investor group TGT, accuses Tyr Capital of overlooking critical risk management measures and investor cautions regarding its FTX engagement.

This alleged oversight by the crypto hedge fund has led to substantial financial repercussions.

The lawsuit centers on the claim that Tyr Capital did not act quickly enough to FTX’s financial troubles. TGT alleges that although the firm raised concerns to Tyr’s Chief Investment Officer between November 7 and 10, 2022, Tyr waited until November 11, the day FTX declared bankruptcy, to try to withdraw assets.

The crypto hedge fund argues this delay caused substantial losses, leading them to seek control over the remaining assets.

Firmly denying the allegations, Tyr Capital maintains its commitment to regulatory and contractual obligations. The firm underscores its dedication to legal integrity and has chosen to withhold detailed comments due to the ongoing investigations.

“Given there are ongoing investigations as a result of these false claims, we cannot comment in detail as we refuse to prejudice those investigations. There is no valid legal claim that can be asserted,” Tyr said.

Read more: GSD Capital Review: A Guide to the AI-Powered Hedge Fund

This lawsuit underscores the intricate and high-risk nature of cryptocurrency investments. The ripple effects of FTX’s collapse have extended far, affecting stakeholders from hedge funds like Tyr Capital to charitable organizations like the Effective Ventures Foundation, which has pledged to return $26.8 million in donations amid its legal challenges.

Read more: Who Is Sam Bankman-Fried (SBF), the Infamous FTX Co-Founder?

Moreover, FTX actively pursues recovery efforts and asset liquidations to ameliorate liquidity and settle creditor claims. A pivotal court filing disclosed FTX’s intention to sell its subsidiary, Digital Custody Inc., to CoinList for $500,000—a stark contrast to its initial purchase price. This sale is a key component of FTX’s strategy to liquidate assets and stabilize financially, aiming to fulfill the claims of its numerous creditors.

Top crypto projects in the US | April 2024
Coinbase Coinbase Explore →
AlgosOne AlgosOne Explore →
Harambe AI Harambe AI Explore →
Chain GPT Chain GPT Explore →
iTrustCapital iTrustCapital Explore →

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Frame-2264-1.png
Harsh Notariya
Harsh Notariya excels in delivering SEO-optimized crypto news under tight deadlines. Previously, as a Growth Marketer at Sporty and a Community Consultant at Totality Corp, he significantly boosted community engagement and followers. Harsh also crafted engaging content for top crypto influencer Shivam Chhuneja, blending meme references for an educational yet fun experience. His versatile skills make him a notable figure in crypto journalism.
READ FULL BIO
Sponsored
Sponsored