The Delaware chapter courtroom dealing with the FTX property authorised a petition on Thursday from Three Arrows Capital (3AC) to considerably broaden its declare in opposition to the property from $120 million to $1.53 billion, marking a significant growth within the ongoing fallout from the collapse of Sam Bankman-Fried’s crypto empire.
3AC, as soon as a dominant crypto hedge fund with over $3 billion in reported web belongings, collapsed in 2022 whereas it nonetheless had deep monetary ties to FTX, Sam Bankman-Fried’s soon-to-collapse crypto change. The hedge fund initially filed a proof of declare price $120 million in opposition to FTX in July 2023 — including its identify to an extended checklist of customers and buyers in FTX who misplaced cash on account of its sudden insolvency.
In November 2024, 3AC’s liquidators amended their declare after discovering new proof suggesting that FTX had liquidated $1.53 billion in 3AC’s belongings simply two weeks earlier than the hedge fund commenced its personal liquidation proceedings two years prior. They argued that FTX’s liquidation of 3AC’s funds was carried out to fulfill a $1.3 billion legal responsibility to FTX, an obligation that 3AC claimed was not sufficiently substantiated.
FTX’s chapter mentioned the $1.3 billion legal responsibility represented collateral for a mortgage FTX made to 3AC, however the courtroom dominated in favor of 3AC, discovering inadequate proof to assist FTX’s mortgage declare.
The ruling permits 3AC to pursue a considerably bigger portion of FTX’s remaining belongings, probably reshaping creditor payouts.
FTX, which started distributing funds to collectors in February 2025, mentioned the expanded declare ought to have come sooner, arguing that it could burden different collectors and complicate its reorganization plan. The courtroom, nonetheless, decided that 3AC’s delay was justified, provided that the liquidators solely uncovered the complete extent of their declare in mid-2024 attributable to lacking monetary information from FTX and a scarcity of cooperation from 3AC’s founders, Zhu Su and Kyle Davies.
3AC, based in 2012, had grown into one of the crucial influential monetary companies within the cryptocurrency business by 2022. Its collapse was among the many first and largest dominoes to fall earlier than the broader crypto market imploded in 2022, which finally set off the chain of occasions that exposed fraud in Sam Bankman-Fried’s crypto empire.
Bankman-Fried is at the moment pursuing an attraction of his legal conviction and 25-year jail sentence. Following the collapse of 3AC, Su was detained in Singapore and sentenced to 4 months in jail for failing to cooperate with 3AC’s liquidators. Davies didn’t face any expenses related to the hedge fund’s collapse.
The 3AC founders reunited in 2023 to launch a short-lived crypto change known as OPNX — designed to permit customers to commerce chapter claims of failed crypto firms — which shut down in February.
With the courtroom’s choice, 3AC’s liquidators now have a considerably bigger place within the FTX. chapter proceedings, elevating questions on how the expanded declare will affect distributions to different collectors. The ruling additionally underscores the shortage of transparency at each FTX and 3AC — additional complicating efforts to untangle each companies’ belongings and obligations.