Liquidators of Three Arrows Capital (3AC) are intensifying their legal case against the bankrupt crypto exchange FTX, aiming to raise their claim from $120 million to $1.53 billion. The defunct hedge fund argues that FTX’s actions just before its collapse caused significant harm to 3AC’s creditors.
3AC’s Allegations of “Unfair” Liquidation Against FTX
According to Bloomberg, 3AC’s liquidators allege that two weeks before 3AC’s bankruptcy, FTX liquidated and seized the hedge fund’s assets on its platform to cover a $1.33 billion debt. The liquidators contend that these actions were “avoidable and unfair,” alleging that FTX breached both contractual and fiduciary duties. Additionally, 3AC accuses FTX of delaying access to essential information, which forced the hedge fund to analyze raw data to assess its losses. Only in August, 3AC states, were they able to confirm the full liquidation amount.
FTX, however, asserts that an unnamed individual connected to 3AC started the liquidation process. The platform has not yet confirmed the person’s identity. A hearing on 3AC’s motion to amend its claim is set for November 20.
3AC Expands Legal Pursuits to Terraform Labs
Beyond FTX, 3AC’s liquidators have filed a high-value claim against Terraform Labs, accusing it of misleading 3AC about the stability of its assets. In August, they submitted a $1.3 billion claim in Terra’s U.S. bankruptcy case, arguing that Terra promoted its algorithmic stablecoin, TerraUSD (UST), and LUNA token in ways that artificially boosted their value. According to 3AC, these claims led them to make substantial investments, which ultimately resulted in major losses.
FTX’s Own Recovery Efforts Target Key Crypto Firms
While defending against 3AC’s claim, FTX has increased its asset recovery initiatives. On November 8, FTX’s bankruptcy estate filed a $100 million lawsuit against SkyBridge Capital and founder Anthony Scaramucci, aiming to reclaim funds spent by former FTX CEO Sam Bankman-Fried on investment deals. Two days later, on November 10, FTX filed a separate lawsuit against Binance and CEO Changpeng Zhao, arguing that Bankman-Fried’s $1.75 billion repurchase of Binance’s stake in FTX was fraudulent, as FTX was insolvent. On November 11, Alameda Research, the trading branch of FTX, filed a lawsuit against Waves founder Aleksandr Ivanov to recover approximately $90 million in crypto assets.
Court Rulings Could Shape Crypto Bankruptcy Cases
With lawsuits involving several high-profile firms, the outcomes of these cases may shape the future of cryptocurrency insolvency and asset recovery. The upcoming November 20 hearing on 3AC’s case against FTX could prove crucial for establishing liability and setting a precedent for similar cases.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
I believe that Web3 is not only a technological shift but a cultural and creative one. Strong ideas, thoughtful communication, and human-centered design will shape which technologies thrive and how communities evolve around them. My writing and research reflect this belief, focusing on clarity, relevance, and long-term perspective.
Professional Links Website: https://coinography.com LinkedIn: https://www.linkedin.com/in/tobyrothschild/
