Three Arrows Capital Liquidators Seek to Mark Up Claim Against FTX to $1.5 Billion

Key takeaways

• Three Arrows Capital liquidators are striving to increase claims against FTX from $120 million to $1.3 billion.
• In the review of the claims, the defunct hedge fund cited that FTX liquidated 3AC assets improperly, harming 3AC creditors.
• FTX and its sister trading platform, Alameda Research, intensified moves for more crypto recovery via recent lawsuits.

Three Arrows Capital Liquidators Strive to Increase Claims

The liquidators of the collapsed hedge fund Three Arrows Capital (3AC) have initiated a lawsuit against FTX to increase their claims.In a recent filing, the liquidators scaled up their claims from $120 million to $1.5 billion, according to a Bloomberg report.

Further, the filing mentioned that two weeks before 3AC's closure, FTX mishandled 3AC's assets. It accused the exchange of forcibly liquidating and seizing 3AC's assets, which were later diverted to settle a $1.33 billion debt.

In addition, 3AC argued that those liquidations were avoidable and unfair." Moreover, FTX's move triggered the drastic fall of the hedge fund, inflicting severe harm on its creditors.

The filing maintained that FTX undervalued the transactions, which reflects a breach of contract and trust. So, it called for the invalidation of the liquidations of those assets.

Also, the filing argued that FTX failed to provide the relevant information on time, making 3AC use raw data to calculate its losses. It stated that 3AC could only evaluate the accurate liquidated amount in August this year.

On its part, FTX claimed that it was someone affiliated with 3AC who initiated the firm's asset liquidation. A court hearing will be held on November 20 to deliberate 3AC's motion.

Similarly, Three Arrows Capital also seeks claims against Terraform Labs, another defunct crypto entity. 3AC filed a $1.3 billion claim against Terraform in August this year.

FTX And Alameda Research Intensify Crypto Asset Recovery Via More Lawsuits

The imploded crypto exchange FTX and its sister trading platform Alameda Research have intensified their asset recovery mission via recent lawsuits.

Recall that FTX filed for US Chapter 11 bankruptcy protections in November 2022, following its management of customers' funds. Following the bankruptcy proceedings, the company had generated massive funds to repay its debt of about $11.2 billion.

As of October 2024, FTX claimed it has amassed between $14.7 billion and $16.5 billion for the repayment of its creditors. The bankrupt exchange received the court's approval to repay 119% of creditors' claims against the firm as of November 2022.

However, it has initiated about 23 fresh lawsuits to facilitate the recovery of more crypto assets, according to Forbes.

On November 8, 2024, FTX filed a lawsuit against SkyBridge Capital and its founder, Anthony Scaramucci. In the suit, the exchange seeks to recover $100 million its former executive Sam Bankman-Fried spent in 2022 through investment deals with Scaramucci and SkyBridge.

Also, on November 10, FTX initiated another lawsuit against the leading crypto exchange, Binance and its ex-CEO, Changpeng Zhao. This case focuses on a $1.75 billion repurchase deal Bankman-Fried conducted with Binance in July 2021. According to the suit, the deal was fraudulent since the crypto exchange was already insolvent during the period.

Similarly, on November 11, Alameda Research sued Waves founder Aleksandr Ivanov with claims to recover $90 million in crypto assets.

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