The legal showdown between two fallen crypto giants continues as FTX has formally objected to a $1.53 billion claim filed by the now-defunct hedge fund Three Arrows Capital (3AC). Filed in a Delaware bankruptcy court, the objection argues that the massive claim has no merit and should be thrown out entirely.
In a new court filing, FTX lawyers slammed 3AC’s claim as “illogical and baseless,” arguing the hedge fund knowingly made high-stakes bets on rising crypto prices. When the market crashed in 2022, those leveraged positions imploded, but FTX says that doesn’t mean other creditors should cover 3AC’s losses.
3AC’s claim is based on its account balances as of June 12, 2022, alleging that FTX held and then liquidated $1.53 billion in assets. But FTX disputes those numbers, saying the real crypto balance was only $1.02 billion and that 3AC had $733 million in liabilities. After market downturns and 3AC’s own $60 million in withdrawals, FTX claims only $284 million remained, far from the billion-dollar claim.
FTX also clarified that it only liquidated $82 million in 3AC’s assets, which was allowed under existing credit and margin agreements. Surprisingly, FTX argues that this move actually helped 3AC by converting volatile crypto into stable fiat, limiting further damage during the crash.
Moreover, 3AC now has until July 11 to respond to FTX’s objection, with a hearing set for August 12. Meanwhile, both firms continue battling in courtrooms around the globe, 3AC is chasing a $1.3 billion claim against Terraform Labs, while FTX is on a mission to claw back funds through a wave of lawsuits. On the other hand, Sam Bankman-Fried to be released in 2044 after a 25-year fraud sentence.
This courtroom battle shows just how messy the fallout from 2022’s crypto collapse still is, with billions in blame still being passed around.
FTX, once a major crypto exchange, collapsed in November 2022 and filed for bankruptcy due to allegations of fraud, misuse of customer funds, and a liquidity crisis caused by a “bank run” of withdrawals.
FTX calls 3AC’s $1.53 billion claim “illogical and baseless,” arguing 3AC’s losses resulted from its own risky trading, not FTX’s actions.
3AC has until July 11 to respond to FTX’s objection, with a court hearing on August 12 to address the multi-billion dollar dispute.
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