Delaware Court Approves 3AC’s Increased Claim Against FTX
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A Delaware bankruptcy court ruled in favor of the failed hedge fund Three Arrows Capital (3AC), allowing it to increase its claim against FTX from $120 million to $1.53 billion. This decision changes how money left in FTX will be shared among creditors and raises concerns about how FTX handled funds before shutting down.
The case is about claims that FTX sold off 3AC’s assets worth $1.53 billion just before 3AC collapsed. FTX said it had to sell these assets to cover a $1.3 billion loan, but the court did not find enough proof to support this.
Court Sides With 3AC In Dispute Over FTX Funds
The court’s decision means 3AC will now receive a bigger share of the remaining money in FTX. The people handling FTX’s bankruptcy did not agree with this change. They said 3AC waited too long to ask for more money, and allowing this would slow down payments to others who are also waiting for their share.
FTX has already started giving back money to its creditors. Those in charge of FTX’s bankruptcy said if 3AC gets more money now, it will delay payments to others. However, the court said 3AC’s delay was understandable because FTX did not provide clear records, making it hard for 3AC’s team to figure out how much money they were owed.
Before both companies went bankrupt, 3AC and FTX were well-known in the crypto industry. 3AC managed over $3 billion and was considered one of the leading hedge funds.
However, when it collapsed, it triggered a crisis in the crypto market, exposing problems within FTX, which was led by Sam Bankman-Fried.
Legal Battles Continue As 3AC And FTX Cases Unfold
This ruling is another part of the legal troubles surrounding FTX and 3AC. Sam Bankman-Fried, the former FTX boss, is trying to challenge his conviction and prison sentence.
At the same time, one of 3AC’s founders, Zhu Su, was sent to jail for four months in Singapore because he did not help with the bankruptcy process. His business partner, Kyle Davies, has not faced any legal punishment.
Nicolai Sondergaard, a research analyst at Nansen, said that the $1.53 billion is much more than what FTX had shared before about selling assets. However, it might not have been enough to stop 3AC from going broke. Sondergaard said that even if 3AC had the extra $1.5 billion in 2022, they still would not have been able to pay back what they owed.
