3AC Seeks $1.53 Billion Claim Against FTX Amid Asset Seizure Dispute
3AC is going after FTX again. In a new filing, 3AC’s liquidators are asking to increase their original claim from $120m to $1.53b.
This is because they allege FTX seized and liquidated $1.33b of 3AC’s assets just before 3AC went down in 2022. Liquidators say these transactions, which happened just 2 weeks before 3AC filed for bankruptcy, were “avoidable and unfair” and hurt 3AC’s creditors.
According to Bloomberg, 3AC’s lawyers say FTX undervalued the seized assets and breached their fiduciary and contractual obligations. Liquidators also claim FTX withheld critical information and they had to spend months analyzing raw data to confirm the extent of the seized assets by August 2024.
Unfair Seizure and Misconduct
3AC’s liquidators say FTX acted “unjustly” by liquidating the assets without cause. The hedge fund claims FTX mismanaged its assets, ignored its fiduciary duties and hurt its creditors. “These transactions were both avoidable and in breach of good faith”, says a recent filing. FTX says an unknown 3AC person initiated the liquidation but hasn’t proven it.
MBottjer tweeted: “Three Arrows Capital is moving to amend its claim against FTX in the Delaware Bankruptcy Court, increasing the claim from $120M to $1.53 BILLION”. Next hearing is November 20.
https://twitter.com/NorqueNoq/status/1856978153371062718
FTX is dealing with its own legal issues as it chases funds from other parties. In recent weeks FTX filed a $100m lawsuit against SkyBridge Capital and its founder Anthony Scaramucci over investments in former FTX CEO Sam Bankman-Fried. FTX is also in legal battles with Binance’s former CEO Changpeng Zhao over a $1.75b fraudulent repurchase deal that allegedly hurt FTX’s finances.
In another filing FTX says Binance acted deceitfully by accepting $1.76b in crypto under a 2021 share repurchase agreement, funded mostly by FTX’s FTT and Binance’s BNB and BUSD. FTX claims Bankman-Fried used customer deposits despite liquidity issues to complete the transaction which hurt the exchange’s finances.
FTX and 3AC’s Impact on the Crypto Market
As 3AC pursues its multi-billion dollar claim, the crypto industry is watching for the ripples. If 3AC wins, it will set a precedent for how seized digital assets are valued and managed in bankruptcy cases. FTX’s entanglements in multiple lawsuits add to the crypto market’s already existing regulatory and operational risks.
Key Points:
- 3AC seeks to raise its claim against FTX from $120 million to $1.53 billion.
- FTX accused of mishandling 3AC’s assets and violating fiduciary duties.
- FTX also faces lawsuits involving Binance and SkyBridge Capital amidst ongoing recovery efforts.
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