FTX Moves to Dismiss $1.53B Claim by Three Arrows Capital, Citing Reckless Trading

In a significant legal development, FTX has filed a motion to dismiss a $1.53 billion claim from the bankrupt hedge fund Three Arrows Capital (3AC), arguing that the claim is an inflated attempt to recover losses stemming from 3AC's own reckless trading practices. The exchange contends that 3AC's collapse was due to its overleveraged positions rather than any actions by FTX. Court documents reveal that FTX liquidated only $82 million of 3AC's assets following margin call failures, a move the exchange asserts was legally justified under their contractual agreements. This case highlights the ongoing fallout from the 2022 crypto market downturn and raises questions about liability in decentralized finance ecosystems.

FTX Seeks Dismissal of $1.53B Claim from Three Arrows Capital

FTX has filed a motion to dismiss a $1.53 billion claim by bankrupt hedge fund Three Arrows Capital (3AC), calling it an inflated attempt to recoup losses from reckless trading. The exchange argues 3AC's collapse stemmed from its own overleveraged bets, not FTX's actions.

Court documents reveal FTX liquidated just $82 million of 3AC's positions after margin call failures—a MOVE the exchange insists was contractually justified. The hearing is scheduled for August 12, with 3AC's response due by July 11.

This legal battle unfolds as 3AC simultaneously pursues a $1.3 billion claim against Terraform Labs for its role in the LUNA/UST collapse, highlighting the ongoing fallout from 2022's crypto winter.

FTX Rejects 3AC's $1.53B Claim, Attributes Losses to High-Risk Trading

FTX has formally contested a $1.53 billion claim filed by the liquidators of Three Arrows Capital (3AC), arguing the collapsed hedge fund's losses were self-inflicted. The exchange asserts 3AC's downfall stemmed from reckless trading strategies during crypto market turbulence, not FTX's actions.

Legal filings reveal FTX liquidated just $82 million of 3AC's positions—a move the exchange claims preserved remaining account value. The $1.53 billion demand appears inflated, based on disputed accounting methods and inaccurate balance calculations during 3AC's collapse.

This objection in Delaware Bankruptcy Court underscores FTX's stance that speculative losses shouldn't be socialized across its customer base. The exchange maintains contractual liquidation rights were properly exercised during extreme volatility, shifting liability back to 3AC's risk management failures.

FTX Rejects Three Arrows Capital's $1.53B Claim in Bankruptcy Court

Bankrupt cryptocurrency exchange FTX has vehemently opposed a $1.53 billion recovery claim filed by defunct hedge fund Three Arrows Capital (3AC). In a Delaware bankruptcy court filing, FTX attorneys argued 3AC's collapse resulted from its own high-risk trading strategies rather than any actions by the exchange.

The dispute centers on FTX's liquidation of 3AC assets in June 2022, which occurred weeks before the hedge fund's own collapse. While 3AC liquidators claim this action caused $1.53 billion in damages, FTX maintains the moves were justified to satisfy an outstanding loan. The court has previously sided with 3AC, finding insufficient documentation for FTX's loan claims.

This legal battle highlights the ongoing fallout from 2022's crypto market collapse, where Leveraged positions and interwoven platform exposures created a cascade of failures. The case could set important precedents for creditor claims in future crypto bankruptcies.