Three Arrows Capital (3AC) recently announced that it is seeking to amend its claim against the bankrupt trading platform FTX from $120 million to $1.53 billion. The core of the request for amendment is that 3AC liquidators believe that FTX has made major mistakes and misconduct in the liquidation of assets before the company's collapse.

According to Bloomberg, 3AC liquidators said that two weeks before 3AC went bankrupt, FTX liquidated the hedge fund's assets on the platform without approval to repay $1.33 billion in debt. The liquidators accused these transactions of being unfair and avoidable, believing that such behavior caused serious damage to 3AC's creditors. 3AC also accused FTX of underestimating the value of these assets and said that FTX violated the trust and contract between the two parties.

In addition to the asset liquidation dispute, 3AC’s liquidators also pointed out that FTX had serious delays in providing the information required for liquidation, which forced 3AC to conduct tedious analysis from the raw data to calculate the final loss. During this process, 3AC was only able to confirm the actual liquidation amount in August.

FTX refuted the allegations, saying that an unnamed individual associated with 3AC initiated the liquidation of assets, and the identity of this person has not been confirmed so far. The case will be further heard in court on November 20 to decide whether to grant the motion to amend the claim.

3AC also filed a $1.3 billion claim against Terra

In addition to the legal action against FTX, 3AC's liquidators also filed a $1.3 billion claim against Terra in the Delaware Bankruptcy Court on August 9. 3AC accused Terra Labs of misleading it about the stability of crypto assets such as TerraUSD (UST) and Luna (LUNA). The liquidators believe that Terra induced 3AC to make large investments by artificially inflating the market value of these tokens, ultimately causing it to suffer significant losses.

The case focuses on the collapse of UST and LUNA, especially in May 2022, when the collapse of the Terra ecosystem became a "black swan event" in the cryptocurrency industry, causing a devastating blow to institutional investors such as 3AC. The liquidator is seeking compensation for these direct investments to make up for 3AC's financial losses in the incident.

FTX continues to strengthen its recovery efforts

Asset recovery efforts are ramping up in the bankruptcy proceedings of cryptocurrency exchange FTX. Recently, FTX's bankruptcy asset manager filed a $100 million lawsuit against SkyBridge Capital and its founder Anthony Scaramucci, trying to recover funds that Sam Bankman-Fried had invested in the company. In addition, FTX also filed a lawsuit against Binance and its former CEO Changpeng Zhao, alleging fraud in a $1.75 billion repurchase agreement conducted in 2022. FTX believes that the repurchase agreement was conducted after its bankruptcy and is therefore invalid.

In addition, FTX's trading division Alameda Research also filed a lawsuit against Waves founder Aleksandr Ivanov on November 11, seeking to recover approximately $90 million in cryptocurrencies. This series of lawsuits shows that the asset recovery action in the FTX bankruptcy case is accelerating, aiming to recover as much money as possible to repay debts.

Professional background and market influence

These claims not only reflect the risk management and liquidation issues in the cryptocurrency industry, but also reveal the far-reaching impact of the legal battles after FTX's bankruptcy on the entire industry. FTX's bankruptcy brought great market shocks, causing huge financial and trust losses to its creditors and other participants in the crypto ecosystem. In particular, the lawsuits against companies such as 3AC and Terra highlight the serious lack of supervision and trust mechanisms in the crypto market.

As these cases progress, the cryptocurrency industry may face stricter regulation and legal scrutiny in the future, affecting the operation mode and risk control of the entire market. In this context, investors need to be more cautious and ensure that the trading and investment platforms they participate in are legal and compliant to avoid being affected by similar incidents.

Follow the latest developments in the cryptocurrency market and stay tuned for more follow-up reports.

Uncle Qian has been deeply involved in the cryptocurrency circle for many years, and I know very well how precious and ever-changing market opportunities are. In order to help everyone seize every opportunity in the ever-changing market, Uncle Qian will continue to provide you with the latest market analysis and professional trading strategies.
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