FTX Recovery Trust lashes out on Three Arrow Capital’s $1.6 billion claim, asking the courts to deem it unfounded.
The fallen FTX crypto exchange is moving along with their plans to reimburse customers, but not all refund claims have been granted. Three Arrows Capital (3AC), a now-insolvent crypto hedge fund that infamously went down along with Terra Luna back in 2022, has been denied a whopping $1.5 billion claim for FTX-linked financial damage.
Conversely, this legal bid was rejected by FTX due to claims of a different balance during the FTX fiasco in late 2022. According to the original $1.5 billion claim by Three Arrows Capital (3AC), the hedge funds balance hovered around $1.6 billion, while FTX representatives claim that the actual balance was $284 million after deducting the $733 million in margin debt.
FTX Argues 3AC Was A Self-Caused Ruin
Initially, Three Arrows Capital’s (3AC) co-founder Su Zhu accused FTX & the sister company Alameda Research for manipulating the crypto market, particularly relying on cash & digital assets acquired from lenders to bail them out in high-risk or even irrational decision making.
However, the defense’s legal team claims this argument is both legally & factually unfounded, therefore the lengthy 94-page objection filing delves into why the judge should completely disallow the $1.5 billion claim. Just a few weeks back, the recovery fund issued $5 billion in creditor reimbursement.
The Recovery Trust alleged that the 3AC’s demise was self-inflicted due to irrational investment decisions, even though co-founding boss Sam Bankman-Fried was convicted after years of similar behavior in the dual Alameda & FTX management. Ultimately, it’s yet to be seen if the court grants FTX’s motion declaring that 3AC has simply ignored its liabilities & seeks creditors to cover hefty losses for unreasonably leveraged positions.
On The Flipside
Why This Matters
The 2022 FTX fiasco caused a multi-billion dollar domino effect on the market, which negatively affected previously successful crypto firms, hedge funds & traders. On the other hand, hedge funds like Three Arrows Capital are notorious for their high-leveraged plays.
Check out DailyCoin’s latest crypto news:
CoinMarketCap Hit by Wallet Phishing Attack, $43K Stolen
Ripple (XRP) Dives Under $2 Amid SEC vs Ripple Case Stall
People Also Ask:
