FTX Recovery Trust has filed an official objection in Delaware bankruptcy court against Three Arrows Capital's claims.
Overview of the Case
FTX Recovery Trust, which is managing the liquidation process of cryptocurrency exchange FTX, has filed a formal 94-page objection in the US Delaware bankruptcy court against the claims made by hedge fund Three Arrows Capital (3AC). The hedge fund seeks over $1.5 billion due to FTX's bankruptcy.
FTX's Arguments
In its appeal, FTX states that 3AC's claim is "unrealistic, unsupportable, and based on an erroneous assumption regarding the account balance." According to FTX, 3AC is overstating the value of its digital assets. The statement asserts that out of the claimed $1.6 billion, the actual asset value at the time of bankruptcy was only $284 million, which included a margin debt exceeding $733 million.
Potential Consequences for Three Arrows Capital
FTX alleges that 3AC ignored the debt burden and attempted to present its over-leveraged positions as "clean value." If the court rules in favor of FTX, 3AC's claims could be dismissed entirely or significantly reduced. The next hearing is set for August 12.
The legal proceedings are ongoing, and their outcome could have significant implications for the status of Three Arrows Capital's claims.
