A US judge is granting a motion to greatly expand the claim of the failed crypto hedge fund Three Arrows Capital (3AC) against the defunct crypto exchange FTX.
According to new court filings, a judge is granting an expansion to 3AC’s claim against FTX, bringing its total up to a staggering $1.53 billion from just $120 million.
[adinserter block="1"]The document says that FTX, which went bankrupt in 2022 under the leadership of chief executive Sam Bankman-Fried, liquidated $1.53 billion worth of 3AC’s assets on the platform just two weeks before 3AC went under itself.
“Liquidators had learned that as of June 12th, 2022, 3AC had approximately $1.53 billion of assets on the FTX platform, and that between the close of business on June 12th, 2022, and the close of business on June 14th, 2022, nearly all of those assets were liquidated.
The Liquidators’ analysis further showed that as of the close of business on June 12th, 2022, 3AC had a purported liability (called a ‘negative USD balance’) of approximately $1.3 billion which, in the Liquidators’ view, 3AC’s assets were liquidated to eliminate.
In other words, the information obtained by the Liquidators in the year since they filed their Original POC led them to the new conclusion that just two weeks before the commencement of the 3AC Liquidation, the $1.53 billion of assets that 3AC had on the FTX platform were liquidated to satisfy $1.3 billion in liabilities to FTX.”
3AC was hit hard and subsequently failed to meet its margin calls after the Terra (LUNA) ecosystem collapsed in 2022, causing $40 billion to vanish from the digital assets industry. Around that time, 3AC was hit with a notice of default on a $665 million debt owed to the crypto hedge fund Voyager Digital.
FTX also went bankrupt after the collapse of Terra. Bankman-Fried was later found guilty of defrauding investors and mishandling billions of dollars worth of customer funds. He was found guilty in 2023 and sentenced to decades behind bars.
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