US Court Allows Three Arrows Capital to Enhance Its Claim Against FTX

By: Eva Baxter

The U.S. Bankruptcy Court for the District of Delaware has greenlit the request of Three Arrows Capital (3AC) liquidators to significantly amplify their financial claims against the bankrupt crypto exchange, FTX. Initially set at $120 million, the claim has now surged to a massive $1.53 billion. This ruling comes after a series of proceedings where Judge John Dorsey highlighted the timely and sufficient notice provided by the 3AC liquidators regarding their claim. He dismissed arguments from FTX's debtors that tagged the amended proof of claim (POC) as tardy and a potential tactic to hinder the bankruptcy process, attributing any procedural delays to FTX's lapse in providing key documentation.

Three Arrows Capital, a hedge fund that collapsed amidst the tumultuous crypto market shifts, has been intricately involved in ongoing legal maneuvers since filing their initial claim against FTX in June 2023. The decision grants 3AC's liquidators the green light to pursue a more substantial recovery from FTX’s remaining assets. This development adds another layer of complexity to the FTX bankruptcy estate, which is already flooded with various claims from different entities seeking recourse.

The case unfolds against the backdrop of rising pressures in the crypto sector where bankruptcies and financial fallouts have revealed intricate connections between major exchanges and hedge funds. As the legal proceedings continue, they unveil significant implications for stakeholders involved and shed light on the necessity for stringent regulatory oversights in the cryptocurrency domain.