A US bankruptcy court has ruled in favor of liquidators of Three Arrows Capital (3AC), allowing them to increase their claim against the collapsed crypto exchange FTX from $120 million to $1.53 billion.
In a 13 March 2025 ruling , Chief Judge John Dorsey of the US Bankruptcy Court for the District of Delaware dismissed arguments from FTX’s debtors, who had opposed the amended claim as untimely and disruptive to the proceedings.
Instead, Dorsey stated that the delay was primarily due to FTX’s failure to provide key financial records to 3AC liquidators in a timely manner.
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FTX’s Delayed Cooperation Prolonged The Process
“The evidence suggests that the delay in filing the Amended Proof of Claim was, in large part, caused by the debtors themselves,” Dorsey noted.
He added that 3AC’s liquidators had been diligent in their attempts to obtain necessary financial data, but FTX repeatedly withheld the information, slowing the claim revision process.
Initially, Three Arrows Capital’s liquidators had filed a $120 million claim in June 2023 as part of FTX’s bankruptcy case. However, in November 2024, they sought to expand the claim, alleging breach of contract, unjust enrichment, and breach of fiduciary duty by FTX.
According to 3AC’s liquidators, FTX held $1.53 billion in hedge fund assets, which were liquidated to cover $1.33 billion in liabilities in 2022. They argue that these transactions were avoidable and harmed 3AC’s creditors, making them eligible for compensation.
FTX’s debtors had objected to the amended claim, stating that the original filing failed to adequately outline the nature and scope of 3AC’s claims. They also argued that the increased claim amount came too late and should not be allowed.
US court gives Three Arrows nod to increase its FTX claim to $1.53B
Its liquidators also pursued claims against collapsed crypto firm Terraform Labs through a $1.3 billion claim in Terra’s bankruptcy case. #PraeLegal #Ftx $FTX $ftt $lunc $luna pic.twitter.com/VWoZ6LF0kV
— PraeLegal (@PraeLegal) March 14, 2025
Once one of the largest crypto hedge funds, Three Arrows Capital collapsed in June 2022, leading to a series of legal battles.
In addition to its FTX bankruptcy claim, 3AC’s liquidators have also pursued $1.3 billion in claims against Terraform Labs, the company behind the failed Terra ecosystem.
Meanwhile, FTX, which filed for bankruptcy in November 2022, continues its own legal efforts to reclaim lost funds.
The exchange has filed lawsuits against entities including SkyBridge Capital, Binance, and Waves founder Aleksandr Ivanov, seeking to recover assets lost under former CEO Sam Bankman-Fried’s leadership.
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FTX Settles Lawsuit With Bybit
Last year, the FTX bankruptcy estate reached a $228 million settlement with the cryptocurrency exchange Bybit to recover funds for repaying former FTX customers and creditors.
Under the terms of the settlement, FTX will retrieve $175 million in digital assets held by Bybit, and an additional $53 million in BIT tokens, which will be sold to Mirana Corp, Bybit’s investment arm.
FTX originally launched a $1 billion lawsuit against Bybit and Mirana in late 2023. It alleged that these entities used special privileges and “VIP” access to pre-emptively withdraw $327 million in digital assets and cash in the days leading up to FTX’s downfall.
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Key Takeaways
- 3AC’s claim against FTX increased from $120 million to $1.53 billion after court approval.
- The judge ruled that FTX delayed providing key financial records, prolonging the claim process.
- FTX continues legal battles to recover funds, including past settlements and lawsuits against other entities.
