FTX lawyers argued that creditors should not serve as a “backstop” for Three Arrows Capital’s risky leveraged strategy.
Lawyers acting for the collapsed crypto exchange FTX have rebuked a $1.53 billion recovery claim from Three Arrows Capital’s liquidators, arguing the losses resulted from a risky trading strategy that should not be paid for by creditors.
3AC liquidators initially filed a $120 million claim in FTX’s bankruptcy case in June 2023 and expanded it to $1.53 billion in November 2024, alleging claims including breach of contract, fiduciary duty and unjust enrichment.
The liquidators alleged FTX held $1.53 billion in the hedge fund’s assets that were liquidated to settle liabilities in 2022, contributing to 3AC’s collapse, arguing the transactions were avoidable and FTX debtors had delayed providing the information that would have uncovered the liquidation.
