3AC expands lawsuit against FTX to $1.53 billion
3AC funds were used to settle FTX debts
A U.S. bankruptcy court has granted Three Arrows Capital (3AC) liquidators permission to increase their lawsuit against collapsed crypto exchange FTX from $120 million to $1.53 billion.
3AC liquidators have been fighting to reclaim funds held by the hedge fund on FTX since June 2023, when they filed their initial bankruptcy claim against the exchange. Now, they have achieved a major legal victory.
The Delaware Bankruptcy Court rejected FTX lawyers’ arguments that the amended proof of claim (POC) from 3AC liquidators was untimely and an unfair attempt to delay the exchange’s bankruptcy process.
In a March 13 ruling, the court stated that 3AC liquidators had provided sufficient notice of their claim and were entitled to amend it after reviewing all available information.
The delay in the case, the judge ruled, was caused by FTX’s failure to promptly provide relevant records.
"Evidence suggests that the delay in filing the amended proof of claim was largely caused by the debtors themselves," said Judge John Dorsey, adding that FTX repeatedly postponed providing necessary information.
3AC funds were used to settle FTX debts
In the FTX bankruptcy case, 3AC initially filed a $120 million claim. Later, in November 2024, they expanded their claim, citing: breach of contract, unjust enrichment, breach of fiduciary duties.
The liquidators argued that FTX was holding $1.53 billion in 3AC assets, but these funds were used to settle other debts in 2022.
According to 3AC’s legal team, these transactions could have been prevented, but FTX’s debtors delayed providing crucial information, ultimately harming 3AC’s creditors.
As we wrote, customers of the bankrupt cryptocurrency exchange FTX have started receiving payouts. However, this is merely the epilogue to one of the most notorious financial catastrophes in the crypto industry. The story of FTX is not just about the rise and fall of a major exchange but also a scandal that impacted millions of investors worldwide.
