Swiss-based cryptocurrency hedge fund Till Capital Partners is facing accusations of mismanagement from investors, according to a report in the Financial Times.
Swiss prosecutors opened an investigation into Teal Capital following allegations that began in August 2023 that the company ignored early warnings about the collapse of the FTX exchange.
Teal Capital Partners faces legal action
The legal complaint against Tyr Capital Partners was launched by hedge fund TGT, which invested in the company. Swiss prosecutors opened an investigation into Thüll after TGT claimed it failed to act on early warnings about the collapse of the FTX exchange.
Plaintiff TGT is seeking to liquidate the portfolio and take over control of the remaining assets held by Tyr, which includes, among other things, a $22 million claim against FTX. TGT claims it warned Thiel's chief investment officer Edouard Hindy about FTX's financial instability between November 7 and November 10, 2022, just days before the exchange's collapse. are doing.
However, according to legal documents filed in the case, Teal Capital Partners allegedly began efforts to divest assets from FTX around November 11, coinciding with the date FTX filed for bankruptcy.
TGT further alleges that Tyr Capital Partners ignored its internal risk obligations, which stipulate that exposure to a single counterparty cannot exceed 15% of assets. But Till refuted that claim, telling prosecutors that an independent committee set up by the fund had concluded that internal rules had not been breached, according to legal filings obtained by the Financial Times.
Additionally, TGT reported that between January and October last year, the portfolio, including the remaining assets, suffered an 84% loss. In response, Mr Till said the losses were false and fully disputed.
Despite these allegations, Teal Capital Partners, which manages $140 million in assets, disputes the allegations of wrongdoing.
FTX customers are waiting for their funds to be refunded
FTX administrators have abandoned attempts to revive the exchange, but expect customer funds to be refunded based on the value of their investments should FTX go bankrupt in November 2022. During this time, the value of cryptocurrencies such as Bitcoin and Ethereum has more than halved. of current value.
Meanwhile, in April last year, TGT filed a second complaint with the Geneva public prosecutor's office, alleging “crime management” and demanding a “dawn raid” on Till's office.
The raid in which the documents were seized took place on August 17 last year, and Thiel's chief investment officer, Mr. Hindy, was called in to provide information to prosecutors. A spokesman for the Geneva public prosecutor's office said the investigation was still ongoing.
