Administrators handling the collapsed UK currency broker Argentex Group have abandoned thousands of active derivatives trades, leaving most counterparties facing a 98% loss on positions that were in their favor, according to Bloomberg.

Argentex Counterparties Face 98% Loss

FRP Advisory Group, overseeing Argentex's wind-down, issued "disclaimer notices" to counterparties in recent weeks on the volatile portfolio of foreign exchange derivatives that contributed to the firm's July collapse.

The legal maneuver allows insolvency officials to walk away from contracts deemed "onerous" under UK law, crystallizing massive losses for clients while clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term a path for creditor Christopher Harborne's IFX (UK) to recoup some of the £34 million it pumped into a failed rescue attempt.

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The broker's implosion has ensnared high-profile clients, including Wrexham AFC, the Welsh soccer club owned by Hollywood actors Ryan Reynolds and Rob McElhenney. The club had £4.6 million tied up with Argentex when it collapsed, Bloomberg reported in January, representing nearly one-third of the firm's e-money customer funds. While administrators expect customers in Wrexham's category to be repaid, those holding derivatives positions face a far bleaker outcome.

Clients holding derivatives that were in-the-money, meaning Argentex owed them cash when positions matured, now hold unsecured claims expected to return no more than two pence for every pound owed.

These liabilities totaled roughly £13.3 million when the London-based firm entered administration. Meanwhile, Argentex held derivative assets valued at £34.8 million, but has given up pursuing most counterparties on losing trades.

Disclaimer Tactic Crystallizes Client Losses

The disclaimer notices invoke Section 178 of the Insolvency Act 1986, which permits liquidators to renounce ownership of "onerous property,” including unprofitable contracts or assets that pose ongoing liabilities. While commonly used for property leases, the tactic is rarely applied to derivatives portfolios, according to Jeremy Whiteson, a partner at London law firm Fladgate.

"Counterparty risk is more important than market risk," Jeremy Thomson-Cook, a former head of sales and trading at Currency Solutions, told Bloomberg. "Show me a market risk where you stand to lose 98%-99% of your value outside of crypto."

The move frees many counterparties from positions that had moved against them, but devastates clients who were expecting payouts. It also removes a major obstacle for IFX, which is first in line among creditors after providing emergency financing during Argentex's final months.

The firm had initially agreed to acquire Argentex for around £3 million in April 2025, a fraction of its historic market capitalization, before walking away from the deal as regulatory pressure mounted and the firm entered administration.

Derivatives Book Defied Resolution Attempts

Argentex arranged about 3,000 derivative contracts for corporate clients hedging currency risks when it collapsed. The portfolio quickly became a headache for administrators after banks including Barclays and Citigroup closed out their hedges as Argentex spiraled into distress, leaving the book unhedged and vulnerable to market swings. Some positions were not set to expire until 2029.

Attempts to sell the derivatives to an outside buyer fell apart in late August. Administrators also explored closing trades early by paying out clients with winning positions, but a London court ruled this approach was not legally feasible, Bloomberg reported.

Dollar Volatility Triggered Broker's Unraveling

Argentex began unraveling in April 2025 during market turmoil sparked by President Donald Trump's tariff policies and comments criticizing Federal Reserve Chair Jerome Powell. The firm had pursued high-risk "zero-zero lines" dollar trades with counterparties while lacking a treasury function and foreign exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term expertise on its board, Bloomberg previously reported.

The broker offered currency management services and e-money accounts to hundreds of customers beyond Wrexham. When the dollar plunged to multi-year lows against the euro and Swiss franc, Argentex struggled to meet margin calls from banking partners.

IFX, wholly owned by businessman and Reform UK donor Christopher Harborne, extended millions in loans as part of its acquisition plan. The firm ultimately scrapped the takeover as Argentex came under mounting regulatory pressure, leading to the broker's administration under the Payment and Electronic Money Institution Insolvency Regulations 2021.