FTX lawyers oppose 3AC’s $1.53B claim, arguing self-inflicted losses from risky trading, not FTX actions, in Delaware bankruptcy court.
FTX, the collapsed crypto exchange founded by Sam Bankman-Fried, has firmly rejected a $1.53 billion claim by Three Arrows Capital (3AC), the hedge fund that failed after the Terra LUNA crash.
This follows a Delaware bankruptcy court’s decision months ago to allow 3AC to escalate its claim from $120 million to $1.53 billion. In a court filing last Friday, lawyers argued that 3AC’s losses were self-inflicted and urged the court to dismiss the claim entirely.
FTX Lawyers Call 3AC’s Claims Baseless
In June 2023, 3AC initially filed a $120 million claim against FTX’s bankruptcy estate. In November 2024, after gaining court approval, 3AC increased its claim to $1.53 billion, alleging that they liquidated $1.53 billion of its assets in 2022 to settle liabilities, contributing to 3AC’s Collapse. The liquidators argued that these transactions were avoidable and accused them of withholding critical information that delayed the discovery of the liquidation.
The legal team, now overseeing a $5 billion creditor distribution, dismissed 3AC’s claim as “illogical and baseless,” asserting that the hedge fund is attempting to deflect responsibility for its failure. They argued that the claim relies on “inaccurate figures” and ignores the events leading to 3AC’s downfall.
Lawyers Detail 3AC’s Collapse
FTX’s lawyers attributed 3AC’s failure to its high-risk spot and margin trading, partially financed by a $120 million credit line. They acknowledged an $82 million liquidation but maintained it was contractually permitted under the credit and margin agreements, absolving them of responsibility for 3AC’s Collapse.
In June 2022, after the Terra crash, 3AC’s account fell below the $240 million margin requirement. FTX claims 3AC ignored communication attempts and withdrew $18 million in Ethereum (ETH), prompting them to liquidate the account, recovering $82 million.
3AC must file a response by July 11, with a non-evidentiary hearing set for August 12. FTX’s lawyers contend that 3AC is seeking to “extract value” from their estate at the expense of legitimate creditors to offset its failed liquidation.
