FTX Rejects 3AC’s $1.5B Claim Over Risky Trades

• FTX rejects 3AC’s $1.5B claim as baseless. 
• 3AC’s losses are tied to risky trading bets. 
• FTX liquidated $82M to protect the account.

The FTX bankruptcy estate denied Three Arrows Capital’s (3AC) $1.5 billion claim, alleging that the firm generated its losses through risky transactions, not through dealings with a trading counterparty, which FTX had prohibited. According to a 94-page document (included in a filing to the U.S. Bankruptcy Court of Delaware on June 20, 2025) presented by lawyers of FTX, the accusation by 3AC is untenable and absurd.

It goes back to 2022 when both firms experienced a crash in the crypto market, and 3AC liquidators charged FTX with the liquidation of their company, holding 1.53 billion assets. With a net 733 million dollars of margin debt, FTX retorts that 3AC had made net deposits in its account amounting to only 284 million dollars.

As per the court records, 3AC had been in the game of betting riskily on the anticipated increase in the value of the cryptos, which failed after the markets crashed. FTX’s legal department has responded, losses of 3AC were self-inflicted, due to their own speculative positions. The exchange argues that 3AC’s erroneous actions should not force the creditors to pay.

Disputed Liquidation and Account Valuation

The claimant initially demanded $120 million in June 2023, but increased the amount to $1.53 billion in November 2024 after presenting fresh evidence. Liquidators indicate that FTX breached the provision on contractual obligation by conducting the liquidation of funds without providing any notice. In their view, the exchange had suppressed the exchange of important financial documentation, and this process was delaying the procedure of calculating how much 3AC had lost.

FTX denies this, saying that they have sold off only eighty-two million dollars worth of assets to avoid a net balance on their platform as per agreements. The liquidation of the company was according to the filing provided by the exchange that this did not cause destruction of value to The 3AC but rather saved it. The heaviest losses of 3AC took place on the market falls, and the sum of money, which the hedge fund itself withdrew, was 60 million.

On its account, 3AC had a balance of more than 1.59 billion, yet the FTX records indicate at least 1.02 billion crypto assets and a huge amount of liabilities. The court will hold the hearing on August 12, 2025, and 3AC must respond by July 11.

This instance demonstrates the complexity of crypto bankruptcies. These disagreements undermine the FTX recovery plan, which aims to repay creditors $16.5 billion. Terraform Labs is facing new legal action from 3AC, which is suing for $1.3 billion.

This legal battle reflects broader risks in crypto trading. The levered approach, as seen in the case of 3AC, can magnify losses in volatile markets. This can set precedents on the way the courts should treat similar conflicts within the digital asset industry.