US court permits Three Arrows Capital to expand claim against FTX, rejects FTX’s objections

In a ruling handed down on March 13 in the U.S. Bankruptcy Court for the District of Delaware, the judge ordered FTX to pay Three Arrows Capital $1.53 billion, increasing the original $120 million claim filed in June 2023. FTX objected to the decision, arguing that it was a decision made too late and would slow down their bankruptcy process. However, the judge sided with the 3AC liquidators, saying they had given adequate notice of their claim. The judge ruled that the delay in filing the large claim was primarily due to FTX’s failure to provide relevant records to 3AC’s liquidators in a timely manner. 3AC liquidators needed this information to properly evaluate and detail their claim. 3AC liquidators claim that FTX held $1.53 billion of 3AC’s assets, which were liquidated to pay 3AC’s debts. Additionally, 3AC liquidators argued that the transactions could have been avoided and FTX failed to provide information that would have disclosed the liquidation.

Both 3AC and FTX were once big players in Ethereum (ETH) and other altcoins. They filed for bankruptcy in July 2022. Liquidators are now attempting to recover funds by selling off remaining assets and filing various lawsuits to pay creditors, including FTX and Terraform Labs.

Cryptocurrency exchange FTX filed for bankruptcy in November 2022 and has also tried to recover funds through various lawsuits against Binance and Changpeng Zhao. FTX has recently introduced the redemption process conducted by the BitGo and Kraken exchanges.