FTX Denies $1.53B Claim from Three Arrows Capital, Citing Reckless Trading

In a dramatic legal showdown, bankrupt cryptocurrency exchange FTX has rejected a staggering $1.53 billion recovery claim from the collapsed hedge fund Three Arrows Capital (3AC). Court documents reveal FTX's legal team placing blame squarely on 3AC's aggressive trading strategies, accusing the fund of gambling with borrowed funds during crypto's bull market before facing liquidation in the downturn. This high-stakes bankruptcy battle highlights the cascading consequences of excessive leverage in crypto markets and sets important precedents for creditor claims in digital asset insolvencies. The Delaware bankruptcy court's upcoming decision could significantly impact recoveries for FTX's creditors while serving as a cautionary tale about risk management in volatile crypto markets.

FTX Rejects Three Arrows Capital's $1.53B Claim, Blames Hedge Fund's Risky Strategy

Bankrupt cryptocurrency exchange FTX has vehemently opposed a $1.53 billion recovery claim by defunct hedge fund Three Arrows Capital (3AC), asserting the fund's own reckless trading caused its downfall. Court filings reveal FTX's legal team arguing 3AC "bet big on crypto prices rising with money it didn't have" before liquidating positions when markets turned.

The Delaware bankruptcy court previously allowed 3AC liquidators to expand their claim from $120 million after allegedly discovering FTX liquidated $1.53 billion of 3AC assets weeks before the fund's collapse. FTX maintains these liquidations satisfied an outstanding loan—a claim the court found insufficiently documented.

FTX Dismisses 3AC's $1.53B Claim as 'Baseless' in High-Stakes Legal Battle

The fallout from the 2022 crypto market collapse continues to reverberate, with FTX and Three Arrows Capital (3AC) now embroiled in a contentious legal dispute. At issue is a $1.53 billion claim filed by the defunct hedge fund, which FTX has vehemently rejected as inflated and without merit.

Court documents reveal FTX's scathing rebuttal to 3AC's allegations of improper asset liquidation. The exchange contends the hedge fund's speculative, Leveraged positions during extreme market volatility—not FTX's actions—caused its demise. FTX pegs 3AC's actual crypto balance at $1.02 billion, sharply disputing the claimed figure.

The filing paints 3AC as attempting to rewrite history after making disastrous bets during crypto's bull run. FTX maintains the fund's reckless risk management, not exchange malfeasance, led to its collapse—a narrative now being tested in Delaware's bankruptcy court.