The fallout from FTX’s insolvency persists as Attestor Capital, a key stakeholder in the defunct exchange, initiates a lawsuit against claim seller Lemma Technologies. Attestor, a London hedge fund specializing in distressed assets, has positioned itself as a prominent purchaser in the FTX bankruptcy claims space, alongside other significant buyers such as Silver Point Capital and Diameter Capital Partners.
Attestor’s Legal Dispute with Lemma Technologies
Having acquired at least $400 million in FTX claims as of February, Attestor is now the largest claimant of FTX. The hedge fund, however, has taken legal action against Lemma Technologies, the entity from which it bought one of the most substantial FTX accounts. The lawsuit comes after Attestor reportedly made a 200% profit from the assets it acquired from the beleaguered cryptocurrency exchange.
The legal contention arises from a broken agreement where Lemma, in June 2023, reneged on its deal to sell FTX claims worth $58 million to Attestor. This decision occurred during a time when the value of cryptocurrencies, including Bitcoin, was on the rise, which Attestor suggests may have influenced Lemma’s change of heart.
Complexities in the Legal Battle
Attestor argues that Lemma’s reversal constitutes seller’s remorse and is seeking legal recourse for the failed transaction. Lemma, a Panama-based firm, has yet to publicize its stance on the matter or provide a defense against the lawsuit filed in New York.
Beyond the New York lawsuit, Lemma is entangled in additional legal troubles. Lemma’s principal investor, Junho Bang, is currently embroiled in accusations of crypto asset theft from Haru Invest, a bankrupt crypto lending company. Bang was charged by South Korean authorities following his arrest in January. Haru Invest, known for offering investors a 12% annual return on crypto deposits, halted withdrawals in June 2023, leading to the arrest of its CEO and two executives for allegedly defrauding customers of $830 million.