A U.S. Bankruptcy Court has approved Three Arrows Capital’s (3AC) claim expansion against the cryptocurrency exchange FTX, which went bankrupt last November.
3AC’s claim now totals a huge $1.53 billion. The court dismissed objections from FTX debtors and said that approving the claim could help expedite the FTX bankruptcy process.
The Background of the Claim
Three Arrows Capital, a now-defunct cryptocurrency hedge fund, initially filed the claim for $120 million. But after a revision in November 2024, the claim dramatically escalated to $1.53 billion. And here’s where things get even more interesting. The filed claim from 3AC not only accuses FTX of unfair liquidation of 3AC’s positions, but it also alleges that FTX unlawfully seized a total of $1.33 billion in assets from 3AC during the time leading up to the spectacular implosion of FTX itself in November 2022.
The legal fight surrounding this allegation has been closely observed by industry participants and onlookers, as it is one of the largest and most public disputes to emerge in the wake of FTX’s abrupt collapse. What makes this situation even worse is the belief held by many in the crypto space that FTX was a solvent business—all the way up to when it filed for bankruptcy in November 2022. The crux of this case is the allegation that FTX executed liquidation commands wrongfully—that it didn’t have to—and that those liquidation commands (which 3AC claims were executed improperly) led to massive asset losses for 3AC.
🚨 U.S. Court Approves 3AC’s $1.53B Claim Against FTX!
The U.S. bankruptcy court has approved Three Arrows Capital (3AC) liquidators' claim expansion against FTX to $1.53B, dismissing objections from FTX debtors.
🔹 3AC alleges FTX unfairly liquidated and seized $1.33B in… pic.twitter.com/c3ixuQj5oW
— Followin (@followin_io) March 14, 2025
FTX’s ongoing bankruptcy proceedings have been dealt a “critical moment, ” with a judge approving an expansion of claims that Three Arrows Capital filed against FTX. The court’s approval now means the defunct hedge fund’s claim could affect the distribution of funds to creditors of FTX, potentially impacting the much larger sums of money tied up in this case. The claims against FTX, like the claims already made against its sister company Alameda Research, mean that FTX now has even more of a mountain to climb if it hopes to satisfy any creditors. 3AC now claims FTX owes it $1.5 billion.
This ruling is probably going to affect how much creditors can recover from the FTX bankruptcy. If 3AC’s claim is found to be valid and in the amount they stated, then it is going to throw FTX’s asset distribution during bankruptcy into some disarray. Now creditors are bound to face an extended wait time for any kind of payout to arrive and they are also bound to see what they do receive decreased in amount.
This case could set a precedent for how other claims are managed following FTX’s bankruptcy, particularly as more and more displeased parties emerge to air their grievances helter-skelter against the platform.
Speculation is rife, of course, and legal experts are hardly a unanimous front on these things. But one opinion is that this ruling, if it goes a certain way (namely, toward the plaintiffs), could prompt even more potential claimants to step forward and revise their claims upward.
The Broader Implications for the Crypto Industry
The Three Arrows Capital case is not simply a matter of great moment for those directly involved; it serves as something of a touchstone for the crypto industry. The FTX collapse—that great black hole of recent crypto history—impacts everybody in the crypto sector and, in the eyes of some, is impacting the regulatory landscape too.
The FTX disaster has left a damaged cryptocurrency industry in its wake. Legal battles, like the one between 3AC and FTX, now serve as reminders of the risks built into the mostly unregulated cryptocurrency market. Meanwhile, the situation in the FTX bankruptcy seems only to get worse as time goes on. Somehow, an exchange that was supposedly a top performer in the industry has led to an outcome where an unfathomable number of very real dollars are now trapped in bankruptcy proceedings, with a sobering number of cryptocurrency enthusiasts left wondering whether they will ever see any of their assets come back to them.
In addition, the court’s decision to let 3AC expand its claims could push other institutions and creditors with claims against FTX to reexamine those claims. And as the court process moves forward, the impact of allowing 3AC to revise and expand its claims could be the filing of additional or revised claims, which would push out the resolution of the bankruptcy case.
Looking Ahead: Will This Reshape FTX’s Bankruptcy Payouts?
The approval of 3AC’s $1.53 billion claim now adds even more uncertainty to how the FTX bankruptcy proceeds. The claim started out modest but was later upped to what doesn’t appear to be a credible amount: $1.53 billion. How that affects recovery efforts is hard to say but won’t be good.
This ruling also raises significant aspects about the way forward for the cryptocurrency sector and how it will resolve matters of transparency and risk oversight. After the FTX debacle, as things settle down, both the marketplace and the regulators are bound to watch this case closely since it’s got precedent-setting potential for what happens next with those crypto exchanges that are of large scale.
In the near future, this story will be closely followed by the creditors of FTX—retail investors, institutional players, and other financial entities—who are waiting to see how the legal and financial landscape shakes out. Will this ruling mean greater recoveries for them in a timelier manner, or will it signify extended delays? It’s not clear yet, but this decision is a key development in the still-unfolding story of FTX’s collapse.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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