Distressed Assets Buyer Attestor Battles Over FTX Claim

London-based financial firm Attestor is in a legal battle involving the bankruptcy of FTX.

Attestor, known for its expertise in investing in distressed assets, bought FTX’s distressed assets at low prices, a move that resulted in profits. However, the deal also presented Attestor with unexpected challenges, Bloomberg reported Monday (March 18).

The firm’s trade with Lemma Technologies, a Panamanian firm, is under dispute, according to the report. Attestor purchased one of the largest FTX accounts from Lemma, but the latter has decided to retain the claim for itself. Attestor’s lawyers are arguing that this is a case of “seller’s remorse,” but Lemma has yet to publicly explain its stance.

The FTX bankruptcy is unusual in the world of distressed investing, the report said. Unlike traditional distressed investments involving defaulted bonds or loans, buying up claims on client accounts is a riskier transaction. Attestor’s trade with Lemma was one of the largest of its kind, with the value of the claim jumping from $58 million to an expected payout of $165 million.

Adding to the complexity of the situation is the involvement of Junho Bang, the principal investor of Lemma Technologies. Bang is facing charges in South Korea, accused of stealing digital assets from a lender called Haru Invest, per the report. His legal troubles and Attestor’s suit over the FTX claims are happening independently, but he remains a central figure in both cases.

Despite the challenges, Attestor, founded by German investor Jan-Christoph Peters, could be one of the biggest winners from the bet on FTX’s bankruptcy assets, according to the report. The firm has purchased around $400 million worth of FTX claims.

However, the nature of the FTX bankruptcy and the involvement of individual client accounts have made the process of gathering and negotiating claims more complicated than traditional distressed investments, the report said.

In another development around the FTX bankruptcy, a U.S. judge approved FTX’s proposal to sell its shares in artificial intelligence startup Anthropic, in which FTX invested $500 million in 2021. FTX expects to make a profit from the sale.