FTX, currently in bankruptcy proceedings, is contesting a $1.53 billion claim made by Three Arrows Capital. This dispute may have significant implications for creditor payouts and future legal proceedings within the cryptocurrency sector.
Overview of the Case
FTX filed an objection to the claim on June 22, 2025, within the context of ongoing bankruptcy proceedings. The dispute centers on the potential impact of this claim on the broader FTX creditor pool.
FTX's Arguments
FTX's legal team contends that the claim, expanded from an original $120 million, is exaggerated and unwarranted. The U.S. Bankruptcy Court in Delaware previously sided with Three Arrows Capital. Three Arrows Capital managers Su Zhu and Kyle Davies led the now-defunct hedge fund. FTX questions the validity of the claim, citing an alleged worth of only $284 million.
Potential Impact on Creditors
The legal proceedings could significantly affect the distribution of remaining assets to creditors. Approval of the claim may reduce individual creditor recoveries by around 20%. This situation reflects similar occurrences in past crypto insolvencies like Mt. Gox and Celsius, where late-stage claims affected creditor expectations and outcomes. Analysts warn of potential volatility in token markets managed by both entities, including ETH and BTC.
The dispute between FTX and Three Arrows Capital highlights the challenges in determining creditor rights during large insolvencies. The outcomes of this case may have long-term implications for legal standards regarding cryptocurrency bankruptcies.
