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3AC Raises FTX Claim Amid Bankruptcy Proceedings, Now Seeking $1.53B

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Harsh Chauhan
Published
By Harsh Chauhan
Edited by Ryan James
Key Takeaways
  • 3AC liquidators raised their claim against FTX from $120 million to $1.53 billion, citing unfair asset liquidation.
  • FTX refutes the accusations, arguing that a person linked to 3AC authorized the asset liquidation.
  • The court will review 3AC’s request to amend its original claim on Nov. 20.

FTX faces a new challenge with Three Arrows Capital (3AC) liquidators. In a recent move, the 3AC liquidators intensified their legal battle against FTX by increasing their claim amount.

The liquidators’ demands stem from allegations that FTX unfairly liquidated the hedge fund’s assets just weeks before its downfall.

Accusations of Unfair Transactions

The 3AC liquidators filed an initial claim of $120 million with FTX, but according to the court filings, the amount has increased to $1.53 billion , which is a substantial change in the demands. The filings assert that FTX seized $1.33 billion worth of its assets to settle outstanding debts and claimed it was unavoidable and detrimental to the interest of its creditors.

3AC liquidators argue that FTX executed the transactions under questionable circumstances. The liquidators claim the exchange intentionally undervalued the assets in question to benefit its position.

The case now hinges on whether FTX’s actions breached any fiduciary duties. 3AC alleged FTX not only mishandled the liquidation process but also withheld critical information necessary for the liquidators to accurately assess the impact of the sales.

Three Arrow claims it wasn’t until months after the initial liquidations that they obtained a clear picture of the damage.

FTX’s Defense

Currently caught up in its bankruptcy proceedings, FTX rebutted 3AC’s accusations. The exchange claims the liquidation of 3AC assets was not entirely under its control, according to FTX, an unidentified individual linked to 3AC authorized liquidations.

FTX’s rebuttal is admissible only if the exchange provides conclusive evidence of the identity of the person in question.

The exchange’s bankruptcy estate recently filed a $100 million lawsuit to recover investments made by the former CEO, Sam Bankman-Fried. The lawsuit also targets Anthony Scaramucci and his company, SkyBridge Capital.

On Nov. 20, the court will review 3AC’s request to amend its original claim.

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Harsh Chauhan

Harsh is an experienced crypto journalist with a background in covering Crypto, Blockchain, Web3, NFTs, and AI. With a foundation in business and blockchain, Harsh delivers timely updates and insights to provide value to his readers.
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