FTX Disputes Three Arrows Capital’s $1.5 Billion Claim
FTX, the cryptocurrency exchange now in bankruptcy proceedings, has formally objected to a $1.53 billion claim filed by liquidators of the collapsed hedge fund Three Arrows Capital (3AC). The claim, originally filed for $120 million in June 2023, was expanded to $1.53 billion by November 2024. FTX’s legal team maintains the claim lacks merit, asserting 3AC’s losses resulted from its own speculative trading strategies rather than any misconduct by FTX.
The Core Legal Dispute
3AC’s liquidators allege FTX improperly liquidated $1.53 billion of the hedge fund’s assets in 2022. FTX counters that only $82 million was liquidated under standard margin agreement terms to maintain required account balances. “These claims attempt to rewrite history by blaming FTX for 3AC’s own failed bets,” stated an FTX court filing.
Current Legal Status
After Chief Judge John Dorsey approved the expanded claim in March, FTX filed its objection in Delaware Bankruptcy Court. A hearing before Chief Judge Karen Owens is scheduled for August 12, with 3AC required to respond by July 11. Legal experts note this case may set important precedents for crypto bankruptcies.
Broader Industry Implications
The dispute highlights growing legal complexities in crypto finance. 3AC has separately filed a $1.3 billion claim against Terraform Labs, demonstrating how major crypto collapses create cascading legal battles. These cases test how traditional bankruptcy frameworks apply to digital asset markets.
