Key Takeaways
- 3AC’s liquidators increased their bankruptcy claim against FTX to $1.53 billion.
- The court approved the expanded claim involving breach of contract and unjust enrichment.
Three Arrows Capital’s (3AC) liquidators won approval to increase their bankruptcy claim against FTX from $120 million to $1.5 billion, according to a court filing shared today by Michael Bottjer, co-founder of FTX Creditor, an entity focused on providing liquidity solutions for creditors affected by FTX bankruptcy. Russell Crumpler and Christopher Farmer, appointed to manage the liquidation of 3AC in the British Virgin Islands (BVI), originally filed a proof of claim (POC) for $120 million, aimed at recovering assets that may have been improperly transferred before 3AC declared bankruptcy.
The court filing
However, after further investigation and discovery, they uncovered new evidence indicating that 3AC had approximately $1.5 billion in assets on the FTX exchange as of June 12, 2022. Nearly all of these assets were liquidated between June 12 and June 14, 2022, to satisfy a $1.3 billion liability to FTX. These findings led to the liquidators’ motion to amend the POC to increase the claim amount from $120 million to $1.5 billion. FTX’s debtors opposed the amendment, arguing it lacked proper notice and was filed too late. However, the court determined the original claim provided sufficient notice, as both claims related to the same core event – the liquidation of 3AC’s FTX account between June 12 and 14, 2022.
The judge noted that FTX’s debtors possessed relevant financial information but withheld it from 3AC’s liquidators, contributing to filing delays. While FTX argued the increased claim would disrupt its reorganization plan, the court found no concrete evidence supporting this assertion. Ultimately, the court ruled in favor of 3AC, allowing the $1.5 billion amended POC to proceed.
Apart from FTX, 3AC’s liquidators also sought a $1.3 billion claim against Terraform Labs. The filing was lodged with the US Bankruptcy Court for the District of Delaware last August. The liquidators allege that Terraform Labs misled 3AC about the stability of TerraUSD (UST) and Luna (LUNA), artificially inflating their prices through market manipulation. This led 3AC to invest heavily in these tokens, resulting in major financial losses when the Terra ecosystem collapsed in May 2022. Terraform Labs’ co-founder, Do Kwon, is facing multiple federal fraud charges related to the collapse of UST and LUNA. His trial is scheduled to begin on January 26, 2026.
