Three Arrows Capital demands $1.5B increase in the FTX lawsuit
- Three Arrows Capital (3AC) liquidators seek court to increase their claim against FTX from $120M to $1.53B.
- 3AC claims FTX breached fiduciary duties, withheld crucial information and harmed creditors by an unfair asset liquidation.
- FTX denies the allegations, stating a 3AC representative initiated the liquidation and is suing other crypto companies.
Liquidators managing Three Arrows Capital's (3AC) bankruptcy have filed a motion to raise their claim against FTX from $120 million to $1.53 billion. Bloomberg reports that FTX allegedly liquidated and seized around $1.33 billion in assets from the hedge fund to settle debts just two weeks before 3AC’s collapse.
The liquidators claimed these transactions were “avoidable and unfair,” declaring that the abrupt liquidation harmed 3AC’s creditors. 3AC claims FTX undervalued the seized assets, breaching trust, contractual and fiduciary obligations.
The hedge fund accuses FTX of withholding crucial information, compelling the liquidators to analyze raw data before verifying the extent of the August losses.
FTX claims liquidations linked to an unidentified 3AC individual
FTX claims that the liquidations were started by an unknown person associated with 3AC, whose identity remains unknown. Three Arrows Capital (3AC) is engaged in legal disputes, pursuing claims against several collapsed cryptocurrency companies.
In August, 3AC’s liquidators filed a $1.3 billion lawsuit against Terraform Labs, the company behind the failed TerraUSD (UST) stablecoin and its associated token Luna (LUNA).
A Delaware bankruptcy court lawsuit claims Terraform Labs misled 3AC about its ecosystem's stability, resulting in inflated token values and significant investments from the firm. The liquidators seek compensation for damages from the UST and LUNA collapse.
FTX is intensifying efforts to recover lost assets amid its ongoing bankruptcy proceedings. The exchange's bankruptcy estate has filed a $100 million lawsuit against SkyBridge Capital and its founder, Anthony Scaramucci, to recover funds linked to investments made by FTX's former CEO, Sam Bankman-Fried.
Author
Reza Ali
FXStreet
Reza Ali is a seasoned crypto-journalist and analyst with over four years of dedicated experience in the crypto and fintech space. He holds a bachelor’s degree in business administration.
