3AC Sues FTX for $1.5 Billion Over “Unlawful Liquidation”

The liquidators of the defunct hedge fund Three Arrows Capital (3AC) have increased their bankruptcy claim against FTX from $120 million to a massive $1.5 billion. They accuse FTX of unfairly liquidating 3AC’s assets just weeks before the fund’s collapse. FTX, however, argues that a person linked to 3AC authorized the liquidation. With tensions rising, the court will hear the case on November 20.

Here's a rundown of the details.

3AC Slams FTX - Here's Why

3AC believes the sales were both “avoidable” and “unfair,” stating that they were done to settle debts and should be reversed. This new claim for $1.5 billion marks a big increase from their original $120 million filing, as 3AC insists its assets were worth much more.

3AC also claims that FTX did not provide the necessary information to properly calculate the losses. The full details only became clear in August, which 3AC argues shows that FTX mishandled the situation.

FTX Responds to 3AC's Allegations

The court will address 3AC’s request to amend its bankruptcy claim at a hearing on November 20. This could determine the next steps in the case.

Terraform Labs Feels the Burn

Now, 3AC seeks compensation for losses tied to its purchases of UST and LUNA.

The decisions made in these cases will likely have long-lasting effects on the crypto sector.