FTX Disputes 3ACs $1.53 Billion Claim Over Liquidated Assets

FTX has formally contested a $1.53 billion claim filed by Three Arrows Capital (3AC), asserting that the claim is a "baseless" attempt to shift the blame for 3AC's failed trading bets onto other FTX creditors. The dispute centers around the liquidation of 3AC's assets, with FTX acknowledging only an $82 million trade that allegedly benefited 3AC by preserving value.

In a court filing, FTX's legal team argues that 3AC made aggressive, leveraged bets on a crypto market rebound, and when those bets failed, it tried to push the losses onto FTX's bankruptcy estate. FTX insists that 3AC only had $284 million in real account value, not the $1.59 billion claimed by the liquidators, and that 3AC withdrew $60 million before the market fully collapsed.

The legal friction revolves around the account balance as of June 12, 2022, just before both firms imploded. 3AC claims its assets were wrongly liquidated by FTX to settle internal liabilities, but FTX argues that the $82 million liquidation was done in accordance with contract terms to maintain margin requirements. FTX's objection points out that this liquidation actually helped 3AC by shifting deteriorating digital assets into stable fiat.

3AC now has until July 11 to reply to the objection, with a non-evidentiary hearing scheduled for August 12. The dispute is part of a broader legal storm in the crypto world, where failing firms and defrauded investors scramble to recover billions. 3AC has also filed a $1.3 billion claim in Terraform Labs’ bankruptcy case, another sign the firm is working to claw back capital wherever possible.

While fighting off massive claims like 3AC’s, FTX is also moving forward with customer reimbursements. It has now begun its second wave of distributions, totaling over $5 billion, and is partnering with a fintech firm to facilitate global payments. The broader recovery plan, worth between $14.7 billion and $16.5 billion, is based on customers’ dollar-denominated balances as of the bankruptcy date, a move that has drawn criticism given the market was crashing at the time.