FTX Pushes Back on Three Arrows Capital’s $1.53 Billion Claim Amid Bankruptcy Battle
The ongoing legal feud between crypto exchange FTX and the defunct hedge fund Three Arrows Capital (3AC) has taken another twist. In a recent court filing, FTX has formally objected to a $1.53 billion claim made by 3AC, asserting that the collapsed hedge fund owes FTX far more than it could possibly recover. As crypto investors watch closely, this high-stakes bankruptcy litigation underscores the complexities facing insolvent firms in the rapidly evolving digital asset landscape.
3AC’s Allegations Meet Strong Resistance
Three Arrows Capital, which filed for bankruptcy in mid-2022 after failing to meet margin calls triggered by the Terra ecosystem collapse, submitted a staggering $1.53 billion claim against FTX’s estate. The claim reportedly covers open leverage positions, unsettled trades, and assets held on FTX platforms prior to its own collapse. However, FTX debtors argue the figure is vastly inflated and lacks substantiated backing, calling it an “overstated and misleading assertion.”
FTX Claims 3AC Owes Them, Not the Other Way Around
FTX’s legal team counters 3AC’s claim with their own calculations, asserting that 3AC actually owes FTX more than $290 million. According to FTX, 3AC engaged in preferential transactions and benefitted from loans and margin privileges that other customers did not receive. FTX also accuses 3AC of benefiting from insider dealings and engaging in risky trading behavior, which worsened the fallout for other creditors upon the platform’s collapse.
Legal Ramifications for Crypto Bankruptcy Precedents
The conflict between FTX and 3AC could have significant implications for bankruptcy proceedings in the crypto sector. As one of the industry’s most publicized legal tangles since 2022, the resolution of this dispute may establish new standards for cross-claim valuations and creditor priority in decentralized financial environments. Legal experts are monitoring the case closely, as it tests how traditional legal frameworks apply in crypto-specific insolvencies.
Investor Interest Mounts as Resolution Delays
With billions in combined creditor claims tied up in litigation, both FTX and 3AC estates face uncertainty that continues to frustrate affected investors. Creditors from the FTX estate are particularly concerned that larger claims like 3AC’s could dilute potential recoveries. At the same time, the extended legal proceedings contribute to delays in the overall bankruptcy process, leaving investors and customers with little clarity on potential repayment timelines.
What This Means for the Crypto Industry
Beyond the individuals involved, the FTX pushback on Three Arrows Capital’s $1.53 billion claim is a bellwether for the broader crypto ecosystem. The case highlights the urgent need for clearer financial governance, better risk management, and more robust oversight in the DeFi and centralized exchange spheres. As new narratives unfold in court, this dispute could shape crypto regulatory discussions heading into 2025 and beyond.
Stay Informed on Crypto Legal Developments
The FTX and 3AC bankruptcy saga continues to evolve, with new filings and court decisions expected in the coming months. As crypto law becomes increasingly complex, staying informed is critical for investors and industry professionals alike.
Subscribe to our newsletter today to receive timely updates, expert analysis, and actionable insights on the ever-changing world of crypto finance.