Court documents have shown that FTX secretly liquidated $1.53 billion of 3AC's assets just two weeks before the fund's bankruptcy in 2022, challenging previous narratives that 3AC's downfall was solely market-driven.
Background of 3AC Collapse
Once valued at over $10 billion, 3AC collapsed in mid-2022 after a series of failed leveraged trades. The fund had borrowed from over 20 major institutions before the May 2022 crypto crash, which saw Bitcoin fall to $16,000.
Details of FTX Liquidation
Newly discovered evidence shows that the FTX exchange liquidated $1.53 billion worth of 3AC’s assets just two weeks before the fund's collapse. 3AC requested to increase its claim against FTX from $120 million to $1.53 billion, asserting they only recently uncovered the liquidation.
Reactions and Consequences
According to analyst Nicolai Sondergaard, even an additional $1.5 billion would not have saved 3AC from bankruptcy. Changpeng Zhao commented that such revelations represent an 'interesting turn of events.' 3AC continues its efforts to recover funds through FTX's bankruptcy case.
FTX's secret liquidation of 3AC assets just two weeks before the hedge fund's collapse opens new discussions about the bankruptcy and raises questions about FTX's role in the process.
