by Sana Bukhari
New court records demonstrate that FTX covertly sold $1.53 billion of Three Arrows Capital assets two weeks before the massive fund went down. New evidence shows that 3AC did not just fail due to market conditions alone.
Following a crypto market crash in May 2022 the hedge fund Three Arrows Capital (3AC) lost its over $10 billion value as their risky leveraged trades failed. Before going under the hedge fund borrowed funds from 20 leading financial institutions. New research shows FTX sold $1.53 billion in 3AC assets prior to their collapse which they did not reveal until later.
Creditor “Mbottjer” posted online that a pseudonymous anonymous FTX Creditor confirmed FTX started liquidating $1.53 billion more worth of 3AC assets, not just the previously declared $120 million.
2) Why the big jump? 3AC says it only recently discovered evidence that FTX liquidated $1.53B of 3AC’s assets just two weeks before 3AC itself went into liquidation, much more than the $120M originally claimed.
— MBottjer (@Mbottjer) March 13, 2025
3AC Pursues $1.53B Claim Against FTX in Court
The court accepted that 3AC took reasonable actions because FTX informed them after starting their bankruptcy process. The court decides to let 3AC pursue its $1.53 billion claim against FTX during ongoing bankruptcy proceedings.
A British Virgin Islands court placed $1.14 billion of assets on hold for Su Zhu and Kyle Davies on December 21, 2023. Following the bankruptcy of 3AC Teneo thinks its creditors still need to receive about $3.3 billion as unpaid balances.
Although the missing $1.5 billion contributed to 3AC’s bankruptcy the experts doubt if this sum alone was enough to save the company. Nicolai Sondergaard of Nansen Research feels that although 3AC may receive funds beyond their official court-allowed $1.14 billion assets seizure. According to experts it is likely they will recover part of the money but they have not specified the amount.
New information generates talk among cryptocurrency investors. The announcement intrigued Binance co-founder Changpeng Zhao who asked if FTX contributed to the Terra collapse in May 2022.
Interesting turn of events. I didn't know this before, but not surprised either as they (FTX/3AC) were "close".
I am curious if FTX had anything to do with the LUNA/UST crash/depeg in May 2022? https://t.co/oubjKHvfMC
— CZ 🔶 BNB (@cz_binance) March 14, 2025
The Terra ecosystem collapsed in May 2022 with the disconnect of TerraUSD (USTC) and LUNA failure which then destroyed crypto lender 3AC and crypto lender Celsius.
From its position the crypto industry sees and waits for how much of the $1.53 billion funds 3AC can recover from FTX and what more rules may come for the business.
#blockchain #crypto, #decentralized, #distributed, #ledger
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