The legal clash between FTX and Three Arrows Capital (3AC) has intensified, with FTX rejecting 3AC's $1.53 billion claim as baseless.
Current Status of FTX vs Three Arrows Capital
FTX has filed a rebuttal against the 3AC claim, labeling it as 'unreasonable' and 'illogical' in new documents submitted to the Delaware Bankruptcy Court. Initially filed for $120 million, the claim ballooned to $1.53 billion by late 2024. The hedge fund alleges that FTX improperly liquidated its positions shortly before declaring its own bankruptcy. According to FTX, the claim is built on a 'false narrative' and exaggerated figures.
Liquidation Timeline and Disputed Claims
Court documents reveal that FTX triggered its risk protocols and began liquidating 3AC's positions in early June 2022, about five months before FTX's bankruptcy. FTX claims this action prevented further losses and that 3AC's collapse was primarily self-inflicted due to excessive leverage and irresponsible risk management. '3AC failed to manage its account responsibly, ignored repeated margin calls, and voluntarily withdrew substantial assets just days before bankruptcy,' the filing states.
Key Court Dates and Legal Implications
Judge John Dorsey previously allowed 3AC to amend its claim on procedural grounds despite missing the bar date. However, this does not indicate a ruling on the claim's merit. FTX has requested the court dismiss the bulk of 3AC's claim. A non-evidentiary hearing is scheduled for August 12, 2025, and Three Arrows Capital has until July 11 to formally respond.
The FTX vs Three Arrows Capital case highlights complex legal and financial issues in the post-crisis crypto industry. The outcome could influence the distribution of FTX assets among creditors and set a precedent for future crypto bankruptcy cases.
