US courts give nod three arrows to increase FTX claims to 1.53B

The US Bankruptcy Court has approved liquidators to liquidators of the Defunct Crypto Hedge Fund Three Arrows Capital (3AC) to increase the claims against Crypto Exchange FTX from $120 million to $1.53 billion.

Secretary John Dorsey has rejected the FTX debtor's argument that the revised claim evidence (POC) from the 3AC liquidator is premature and an unfair attempt to delay bankruptcy proceedings.

In a March 13 ruling in the U.S. Bankruptcy Court for the District of Delaware, Dorsey opined that after analysing all available information, the 3AC liquidators have fully informed them of their claims and the possibility of revising them. The delay was caused by FTX's failure to quickly share related records, he said.

“The evidence suggests that the delay in submitting revised proof of claims was largely caused by the debtor himself,” Dorsey said.

“The evidence also suggests that the liquidator is eager to try and get the information and that even though he owns the complete information, the debtor will give them to repeatedly delay it.”

3AC liquidators first filed a $120 million claim in June 2023 in the FTX bankruptcy case. It later expanded in November 2024, claiming claims that included breach of contract, unfair enrichment and breach of fiduciary duty.

The liquidators alleged that FTX held $1.533 billion in hedge fund assets that were settled in 2022 to settle $1.33 billion in liabilities.

They alleged that the transaction was avoidable, harmed the 3AC creditors and delayed the provision of information that the FTX debtor revealed the liquidation.

The FTX debtor opposed the amended claim, stating that the original POC was insufficient to inform the nature and quantity that the 3AC liquidator claims were claiming and that it was too late and should be permitted.

Related: FTX filed for bankruptcy two years ago – What's going on now?

Before it collapsed in June 2022, three Arrows Capitals were once one of the largest crypto hedge funds in the industry, with assets of over $3 billion.

The liquidator also pursued a claim against the collapsed Crypto Firm Terraform Labs through a $1.3 billion claim in Terra bankruptcy case.

At the same time, FTX, which filed for bankruptcy in November 2022, is making its own recovery efforts to regain its funds.

Last November, the trio filed a lawsuit against Skybridge Capital and its founder Anthony Scalumucci, regaining the funds paid by former FTX CEO Sam “SBF” Bankman for sponsorship and investment transactions.

Another lawsuit has been filed against Crypto Exchange Binance and its former CEO Changpeng Zhao, sending $1.76 billion worth of cryptocurrency to the exchange as part of a July 2021 repurchase transaction.

Waves founder Aleksandr Ivanov is in the crosshairs with $80 million worth of code sent to wave-based decentralized liquidity protocols in 2022 by Alameda Research.

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