US Judge Grants Motion Expanding Three Arrows Capital’s Claim Against Bankrupt Exchange FTX to $1,530,000,000
A recent development in the ongoing legal battle between the failed crypto hedge fund Three Arrows Capital (3AC) and the defunct crypto exchange FTX has seen a US judge granting a motion to significantly expand 3AC’s claim against FTX. The claim has now been increased from $120 million to a staggering $1.53 billion, as per new court filings.
The court document reveals that FTX, which filed for bankruptcy in 2022 under the leadership of CEO Sam Bankman-Fried, liquidated $1.53 billion worth of 3AC’s assets on its platform just two weeks before 3AC also faced financial collapse.
According to the document, the liquidators discovered that as of June 12th, 2022, 3AC had approximately $1.53 billion in assets on the FTX platform, which were subsequently liquidated between June 12th and June 14th, 2022. This action was apparently taken to address a purported liability of $1.3 billion that 3AC owed to FTX.
The downfall of both 3AC and FTX can be traced back to the collapse of the Terra (LUNA) ecosystem in 2022, which caused significant losses in the digital assets industry amounting to $40 billion. 3AC was unable to meet margin calls following this collapse and also faced a notice of default on a $665 million debt owed to Voyager Digital, another crypto hedge fund.
Similarly, FTX faced bankruptcy after the Terra collapse, and its CEO, Sam Bankman-Fried, was later found guilty of defrauding investors and mishandling billions of dollars in customer funds. In 2023, he was sentenced to a lengthy prison term as a result of these actions.
The legal battle between 3AC and FTX continues to unfold, with the recent expansion of 3AC’s claim shedding light on the complex and high-stakes nature of the cryptocurrency industry. Stay tuned for more updates on this developing story.
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Image credit: Midjourney.
