The United States Bankruptcy Court has approved the request of the Three Arrows Capital (3AC) investment fund to expand its compensation claim against FTX to up to $1.53 billion. This is a notable ruling as the court has rejected objections from FTX's creditors. The court stated that 3AC had delayed filing the claim because FTX did not provide the relevant documents on time, hindering the investigation process.
Initially, 3AC had filed a $120 million compensation claim against FTX in June 2023. However, this claim has since been expanded to include allegations of breach of contract, unjust enrichment, and breach of fiduciary duty. According to court records, 3AC held $1.53 billion in assets at FTX as of June 12, 2022. However, just two days later, 3AC was liquidated to pay off a $1.3 billion debt.
3AC entered liquidation proceedings in the British Virgin Islands in June 2022. Founders Su Zhu and Kyle Davies went bankrupt due to failures from highly leveraged investments, particularly in assets like TerraUSD (UST). This event triggered a ripple effect in the cryptocurrency industry.
This content is for informational purposes only and does not constitute investment advice.
