Three Arrows Capital Liquidators Consider Increasing Claim Against FTX to $1.53 Billion Amid Asset Liquidation Concerns

• Three Arrows Capital (3AC) liquidators are dramatically increasing their claim against FTX from $120 million to a staggering $1.53 billion, amid allegations of improper asset liquidation.

• This revision reflects the liquidators’ position that FTX engaged in unfair practices leading up to 3AC’s collapse, which they contend resulted in substantial damages to creditors.

• “The liquidations were not only avoidable but also executed under terms that breached our trust,” the liquidators stated in their recent filings.

Three Arrows Capital seeks to amend its claim against FTX from $120 million to $1.53 billion, alleging improper liquidation of assets and unfair practices.

3AC Liquidators Seek Compensation for Improper Asset Liquidation

The ongoing saga of Three Arrows Capital (3AC) highlights significant tensions in the crypto landscape following its collapse. Allegations against FTX include claims that the platform liquidated 3AC’s assets prematurely to settle debts, effectively sidelining creditor interests. The liquidators assert that FTX’s actions merely served its financial agenda, undermining 3AC’s rights and defenses. The motion to amend the claim is set for a court hearing on November 20, where these allegations will be scrutinized further.

Claims Against Terraform Labs: 3AC Pursues $1.3 Billion

In addition to addressing its grievances with FTX, the liquidators are also pursuing significant claims against Terraform Labs, where they have filed for $1.3 billion in damages related to misleading promotion practices regarding the Terra ecosystem. These claims focus on TerraUSD (UST) and LUNA, which suffered dramatic declines, causing immense losses for 3AC. The allegations concern deceptive assurances about the viability and stability of these assets, framing Terra’s practices as an orchestrated effort to inflate the perceived value of the tokens.

FTX’s Broader Legal Strategy to Recover Lost Assets

As FTX grapples with its insolvency and ongoing bankruptcy proceedings, the company appears to be on a legal offensive to reclaim lost assets. The recent lawsuit against SkyBridge Capital seeks to recover approximately $100 million, focusing on transactions led by former CEO Sam Bankman-Fried. FTX’s strategy includes taking legal action against both associates and competitors, indicated by its lawsuits against Binance and Waves, reflecting a broader effort to recover misallocated or lost funds from its high-profile dealings.

Legal Ramifications of FTX’s Operations

The complex legal framework surrounding FTX’s bankruptcy reveals numerous potential challenges for recovery efforts. Each lawsuit filed—from SkyBridge to Binance—illustrates an ongoing attempt to clarify asset ownership and financial accountability. In its claim against Binance, FTX contends that a $1.75 billion repurchase agreement was fraudulent given the company’s insolvency status. This creates a critical examination of asset transfer practices within the crypto industry and raises concerns about transparency and ethical standards.

Conclusion

As the liquidators for Three Arrows Capital push to amend their claim against FTX to $1.53 billion, the implications for both firms highlight the fragile state of trust within the crypto sector. The outcomes of these legal proceedings could redefine regulatory approaches and investor confidence across the cryptocurrency landscape. Future actions from both 3AC and FTX will be closely monitored as they could reshape investor expectations and the operational integrity of crypto markets.