- Attestor Capital sues Lemma Technologies over $58 million FTX bankruptcy claim discrepancy.
- Disagreement arises as cryptocurrency surge raises claim value from $58 million to $165 million.
- Lemma was accused of reneging on the deal, termed “seller’s remorse” by Attestor in the court filing.
Attestor Capital, a distressed assets hedge fund based in London is currently embroiled in a legal dispute with Lemma Technologies, a company based in Panama over a distressed asset purchase agreement. Attestor is one of the prominent buyers of FTX bankruptcy claims and is alleging that Lemma is not fulfilling a deal made in June 2021 to sell a particular claim for $58 million.
The lawsuit revolves around a disagreement over a bankruptcy claim that Attestor bought from Lemma last June. The claim which is believed to be linked to an FTX client account was purchased for $58 million. However due to the recent surge in cryptocurrency prices the claim’s value has skyrocketed to an estimated $165 million.
Attestor alleged that Lemma is now attempting to renege on the deal which is a situation the hedge fund describes as “seller’s remorse” in its court filing. The lawsuit claimed that Lemma is refusing to “proceed with the transactions or otherwise honor the trade confirmations.”
Attestor’s purchase highlighted the potential windfalls available in the FTX bankruptcy claims market. Lawyers overseeing the bankruptcy process estimated that investors could recoup 100% of the funds frozen in FTX accounts when it collapsed.
The FTX case has also highlighted the unique challenges associated with cryptocurrency-linked bankruptcies. Celsius Network is undergoing bankruptcy proceedings and has been transferring large amounts of Ethereum to different exchanges to deal with its financial challenges.
A couple of months ago, LookonChain reported that Celsius had deposited 13,000 ETH ($30.34 million) into Coinbase and moved an additional 2,200 ETH ($5.13 million) to FalconX within the past 10 hours. These transactions had attracted attention in the digital currency community due to their significant size and strategic timing.
Attestor, which is known for its aggressive legal tactics, is expected to pursue the lawsuit against Lemma. The hedge fund is one of the largest purchasers of FTX bankruptcy claims with a total investment exceeding $400 million.
FTX and Alameda Research transferred large amounts of Ethereum to Coinbase before market dips according to Spot On Chain. The deposits raised concerns about potential market manipulation. Over 15 days, the entities deposited 6,500 ETH worth $24.57 million into Coinbase across seven transactions.
