US Court Greenlights 3AC’s $1.53 Billion Claim Against FTX

A significant legal development has taken place in the ongoing bankruptcy proceedings of the collapsed crypto hedge fund, Three Arrows Capital (3AC).

The US Bankruptcy Court has granted liquidators the right to revise their claim against the insolvent FTX exchange, raising it from $120 million to an eye-popping $1.53 billion. Chief Judge John Dorsey ruled in favor of the 3AC liquidators, dismissing FTX’s objections that the claim was filed too late or aimed at delaying the bankruptcy process. The judge highlighted that FTX’s failure to provide crucial documents on time had directly contributed to the delays in filing the claim.

Initially, 3AC’s liquidators submitted a claim of $120 million in June 2023. However, in November 2024, they significantly amended their claim, citing various grievances such as breach of fiduciary duty and unjust enrichment.

They accused FTX of liquidating assets worth $1.53 billion from 3AC, which was used to settle its debts of $1.33 billion in 2022. This process, they argued, caused significant harm to 3AC’s creditors, and they contend that the liquidation could have been avoided had FTX shared pertinent information in a timely manner. Despite FTX’s objections, the court ruled that the liquidators had demonstrated due diligence in their efforts to obtain necessary records.

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Once a powerhouse in the crypto hedge fund sector with over $3 billion in assets, Three Arrows Capital’s collapse in 2022 sent shockwaves through the industry. The firm’s liquidators have not only sought compensation from FTX but are also targeting Terraform Labs, filing a $1.3 billion claim in its bankruptcy case. Meanwhile, FTX, which filed for bankruptcy in November 2022, continues to work towards recovering its funds.

As part of its efforts, FTX has filed lawsuits against several entities, including SkyBridge Capital and Binance, seeking to recoup substantial losses related to sponsorship deals and cryptocurrency transfers.

Source

Alexander Stefanov