Three Arrows Capital Wins Big in FTX Bankruptcy Case: Details

The FTX bankruptcy case has taken another big turn after a Delaware court recently ruled favor of Three Arrows Capital (3AC). This decision has approved the collapsed hedge fund liquidators’ increase in the claim against FTX from $120 million to a massive $1.53 billion.

This new development could affect how FTX’s remaining assets are shared and impact creditors who are still waiting for their payouts.

3AC’s Uncovers $1.53 Billion Loss in FTX Collapse

Three Arrows Capital was once a big name in the crypto industry, managing over $3 billion before collapsing in 2022. 

Its downfall shook the crypto market, exposing major financial problems. At the time, it had strong financial ties to FTX, which also went bankrupt later that year after fraud accusations against its founder, Sam Bankman-Fried. 

In July 2023, 3AC’s liquidators filed a claim for $120 million, thinking that was what FTX owed them. Fast-forward to November 2024, and they found new evidence showing that FTX had actually liquidated $1.53 billion of 3AC’s assets just two weeks before 3AC collapsed. 

This discovery changed everything.

FTX’s Defense Falls Apart in Court

FTX argued that liquidating 3AC’s assets was justified because the company owed it $1.3 billion as loan collateral. However, the court ruled that FTX did not have enough proof to support this claim, allowing 3AC to increase its claim to a huge amount. 

Meanwhile, FTX emphasized that it had already started paying creditors and argued that 3AC’s claim came too late. 

However, the court said the delay was understandable since 3AC’s liquidators had trouble accessing financial records. The judge said the lack of help from 3AC’s founders, Zhu Su and Kyle Davies, made it even harder to uncover the full claim earlier.

When 3AC collapsed, its founders also ran into legal trouble. Zhu Su was jailed four months in Singapore for refusing to cooperate with liquidators, while Kyle Davies avoided legal consequences. In 2023, they tried to return to the crypto scene by launching OPNX, a platform for trading bankruptcy claims, but it shut down in early 2025.

What’s Next for FTX Creditors?

With the court’s recent decision, 3AC’s liquidators have a much bigger position in FTX’s bankruptcy case. This raises questions about how the larger claim will affect payments to other FTX creditors, as another repayment round should start by May 30. 

Many also wonder whether 3AC will actually recover the full $1.53 billion. This raises concerns about hidden financial dealings between 3AC and FTX, making the case even more complicated. 

Meanwhile, Sam Bankman-Fried is trying to appeal his 25-year prison sentence, adding more uncertainty to one of the biggest bankruptcy cases in crypto history.

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