According to recent reports, the liquidators of Three Arrows Capital are seeking $1.3 billion in damages related to the 2022 collapse of Terra (LUNA).
The liquidators of the now-bankrupt cryptocurrency hedge fund are demanding at least $1.3 billion from TerraForm Labs, the defunct digital asset company founded by Do Kwon.
This claim arises from the losses Three Arrows Capital suffered following the 2022 crash of TerraUSD and Luna, both of which were associated with TerraForm Labs.
Court documents allege that TerraForm Labs influenced Three Arrows to invest in Luna and TerraUSD by manipulating the market for these tokens.
This manipulation reportedly "artificially inflated the price of the assets" before their eventual collapse, which not only wiped out Three Arrows’ investments but also caused significant losses across its other assets.
Once a leading cryptocurrency hedge fund, Three Arrows Capital collapsed soon after the downfall of Luna and TerraUSD.
Following this collapse, a court in the British Virgin Islands appointed liquidators from the advisory and consulting firm Teneo.
These liquidators are working to recover funds from Three Arrows founders Su Zhu and Kyle Davies, as well as from other entities, to repay the hedge fund’s creditors.
In a related case, a jury found TerraForm Labs and Do Kwon guilty of fraud in a U.S. government lawsuit related to the Luna collapse in April.
It remains uncertain how much of the claimed amount will be recovered from TerraForm Labs. TerraForm filed for Chapter 11 bankruptcy in January and is now preparing for liquidation after being found liable for fraud earlier this year. #terraClassicLunc #LUNC✅ #Lunc2TheMoonSoon #Cryptocurrencies #LUNAUpdate