London-Based Hedge Fund Attestor Capital Initiates Legal Action Against Lemma Technologies Over Disputed FTX Claims Sale
Attestor Capital, a notable London-based hedge fund with a focus on investments in distressed assets and private equity, has taken legal action against Lemma Technologies over a disagreement regarding the sale of certain bankruptcy claims related to the cryptocurrency exchange FTX. The lawsuit stems from an alleged breach of contract concerning a deal worth $58 million, which was reportedly reached in June 2023.
In the rapidly changing cryptocurrency market, Attestor Capital emerged as a major player in acquiring FTX’s bankruptcy claims, along with other significant claim purchasers like Silver Point Capital and Diameter Capital Partners. These firms collectively acquired at least $400 million worth of claims by February 2023, according to Claims Market data.
The legal dispute arose when Attestor Capital claimed that Lemma Technologies had agreed to sell specific FTX claims for $58 million. However, with the unprecedented surge in cryptocurrency prices—notably Bitcoin, which saw a 130% increase over the past year—Lemma Technologies allegedly reneged on the agreement. Attestor Capital accused Lemma of experiencing “seller’s remorse” and opting to retain the claim instead.
Attestor Capital Seeks Justice in FTX Deal Dispute
This legal performance unfolds against the backdrop of fluctuating cryptocurrency markets and underscores the potential gains inherent in trading distressed assets. Attestor’s substantial profit margin, reportedly 200% from its FTX claims, underscores the volatility and potential rewards in both the cryptocurrency and bankruptcy claims sectors.
The dispute between Attestor Capital and Lemma Technologies highlights the broader implications for handling and transferring bankruptcy claims within the cryptocurrency industry. The case’s outcome may establish a precedent for similar disputes in the future, emphasizing the legal expectations and obligations inherent in such financial transactions.
Cryptocurrency Industry Faces Broader Legal Challenges
The lawsuit against Lemma Technologies is not an isolated incident. The cryptocurrency sector faces broader legal challenges, with Lemma’s principal investor, Junho Bang, under accusations of digital asset theft from the collapsed crypto lending firm Haru Invest. South Korean authorities arrested Bang in January, highlighting the legal risks and regulatory scrutiny facing individuals and entities within the cryptocurrency market.
The sudden suspension of withdrawals from Haru Invest in June 2023 and the subsequent arrests of its CEO and executives for allegedly embezzling $830 million from customers further illustrate the unstable nature of cryptocurrency investments.
These legal developments showcase the intersection between cryptocurrency markets, legal frameworks, and financial regulations. As the case progresses, it is expected to draw attention from investors, regulatory bodies, and legal professionals eager to understand the implications for trading bankruptcy claims and enforcing financial agreements within the evolving landscape of digital assets.
