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US Judge Approves Monumental Claim Increase for Three Arrows Capital in FTX Bankruptcy Case

A US judge has approved a significant expansion of Three Arrows Capital's (3AC) claim against the now-bankrupt cryptocurrency exchange FTX, elevating the claim to $1.53 billion. This decision marks a substantial increase from the initial $120 million claim filed by 3AC. The court documents reveal that FTX, which declared bankruptcy in 2022, liquidated approximately $1.53 billion of 3AC's assets on its platform shortly before 3AC itself collapsed. The liquidation occurred over two days, from June 12 to June 14, 2022, as 3AC struggled with a negative USD balance of around $1.3 billion. This liquidation was reportedly executed to cover the liabilities 3AC owed FTX. The collapse of the Terra (LUNA) ecosystem in 2022, which erased $40 billion from the market, severely impacted 3AC, leading to its inability to meet margin calls and a subsequent default notice from Voyager Digital on a $665 million debt. The bankruptcy of FTX followed the Terra collapse, with its CEO Sam Bankman-Fried later convicted for defrauding investors and mismanaging billions in customer funds.