FTX Trustee Challenges 3ACs $15.3 Billion Claim

The bankruptcy trustee of FTX has formally contested the $15.3 billion claim submitted by Three Arrows Capital (3AC), requesting the court to dismiss it entirely. The trustee contends that 3AC's financial difficulties were primarily due to market volatility and internal withdrawals, rather than any direct consequences of FTX's operations. Earlier this year, a bankruptcy court had significantly increased 3AC’s claim from $1.2 billion to $15.3 billion, drawing heightened attention to the case.

In a recent turn of events, 3AC asserted that FTX sold off around $15 billion in assets just before its collapse, presenting newly discovered evidence to support this claim. However, FTX's legal team disputed these allegations, pointing out that the claim was based on flawed assumptions and inaccurate data. They underscored that following the Terra ecosystem crash in June 2022, 3AC’s account balance dropped below $240 million without margin replenishment, in addition to an $18 million ETH withdrawal.

To prevent potential losses, FTX liquidated $8.2 billion in assets, aiming to cover an $18 million exposure tied to 3AC’s account. The court has established a deadline of July 11th for 3AC to submit its formal response, with a hearing scheduled for August 12th to address the dispute. This ongoing legal battle highlights the complex financial entanglements and the intricate process of unraveling the aftermath of FTX's collapse.

FTX's bankruptcy trustee has challenged 3AC's claim, asserting that the financial setbacks experienced by 3AC were due to market volatility and internal withdrawals, not FTX's operations. The trustee's argument is based on the fact that 3AC's account balance fell below $240 million after the Terra ecosystem crash in June 2022, and an $18 million ETH withdrawal was made without margin replenishment. This led to FTX liquidating $8.2 billion in assets to cover the $18 million exposure linked to 3AC’s account.

The court has set a deadline of July 11th for 3AC to submit its formal response, with a hearing scheduled for August 12th to address the dispute. This ongoing legal battle highlights the complex financial entanglements and the intricate process of unraveling the aftermath of FTX's collapse. The trustee's challenge to 3AC's claim is a significant development in the case, as it could potentially reduce the amount of money that FTX's creditors are owed. However, it remains to be seen how the court will rule on the matter, and whether 3AC will be able to provide sufficient evidence to support its claim.