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3AC wins court approval to expand FTX bankruptcy claim from $120 million to $1.5 billion
In a significant development in the ongoing fallout of the crypto market’s devastating collapse, 3AC’s liquidators have secured court approval to significantly increase their bankruptcy claim against FTX from an initial $120 million to a staggering $1.5 billion.
The massive hike follows an investigation by Russell Crumpler and Christopher Farmer, appointed to manage the liquidation of 3AC in the British Virgin Islands (BVI), which uncovered new evidence indicating that the insolvent hedge fund had approximately $1.5 billion in assets on FTX’s exchange as of June 12, 2022.
In a shocking twist, the liquidators discovered that nearly all these assets were hastily liquidated between June 12 and June 14, 2022, to satisfy a massive $1.3 billion liability owed to FTX. This drastic measure was allegedly taken by 3AC without prior notice or consent from its creditors.
FTX’s debtors initially resisted the amended proof of claim (POC), claiming it lacked sufficient notice and was filed too late. However, the court ultimately ruled in favor of 3AC, concluding that the original POC provided adequate notification as both claims pertained to the same core event – the liquidation of 3AC’s FTX account between June 12 and 14, 2022.
The court noted that FTX had possession of critical financial information but withheld it from 3AC’s liquidators, leading to filing delays. Furthermore, FTX failed to provide concrete evidence supporting its assertion that the increased claim would disrupt its reorganization plan.
With this ruling, the $1.5 billion amended POC is now set to proceed, placing significant pressure on FTX to address its debt obligations. This dramatic turn of events underscores the ongoing complexities and challenges in the cryptocurrency space as insolvent entities fight for survival and accountability.
Separately, it was revealed that 3AC’s liquidators have also lodged a $1.3 billion claim against Terraform Labs with the US Bankruptcy Court for the District of Delaware last August. The filing accuses Terraform Labs of misleading 3AC about the stability of TerraUSD (UST) and Luna (LUNA), artificially inflating their prices through market manipulation.
This, in turn, led 3AC to invest heavily in these tokens, resulting in catastrophic financial losses when the Terra ecosystem collapsed in May 2022. The co-founder of Terraform Labs, Do Kwon, faces multiple federal fraud charges related to the collapse and is scheduled for trial on January 26, 2026.
The implications of this development are far-reaching and may have significant repercussions throughout the crypto landscape as entities increasingly push back against perceived wrongdoings.
Source: https://cryptobriefing.com/3ac-ftx-bankruptcy-claim-expansion/
