FTX Creditors Face $1.5 Billion Blow as 3AC Wins Bankruptcy Battle
In a stunning legal turn, the now-defunct Three Arrows Capital (3AC) has secured a $1.5 billion claim in the FTX bankruptcy case, marking a major win for the collapsed hedge fund’s liquidators and a devastating hit for FTX creditors.
What started as a disputed claim over FTX shares has now ballooned into a court-approved multi-billion-dollar payout, significantly overshadowing the initial $120 million request. For those still waiting to recover losses from the FTX collapse, this ruling has added insult to injury.
How Did 3AC Pull This Off?
3AC’s liquidators have been working aggressively to claw back funds lost in the firm’s spectacular 2022 implosion. Arguing that 3AC had significant exposure to FTX, they pushed for an increased claim and won.
Legal experts say the ruling sets a precedent for other firms looking to maximize bankruptcy recoveries, but for FTX’s already burned creditors, it’s another bitter pill to swallow.
"This ruling reshapes the pecking order of who gets paid first," said a bankruptcy lawyer tracking the case. "Creditors who thought they’d recoup a decent amount from FTX are now facing an even smaller slice of the pie."
What It Means for Crypto Markets
Despite the high-stakes ruling, crypto markets haven’t reacted much yet. But the long-term effects could be far-reaching.
- Other failed funds may follow 3AC’s playbook, pushing for bigger claims in crypto bankruptcies.
- FTX creditors could lose more than expected, leading to longer payout delays.
- Regulatory pressure may increase, as courts grapple with the fallout of crypto collapses.
Failure Isn’t Always the End in Crypto
The ruling has also sent a powerful message failure in crypto doesn’t always mean permanent defeat.
3AC, once considered the poster child of bad risk management, has found a way back into the game at least financially. With liquidators securing a massive payout, some are wondering: Could 3AC or its founders attempt a comeback?
For now, the focus remains on how this will impact other bankruptcy cases and how much more bad news FTX creditors can take.
One thing is clear: in the world of crypto bankruptcies, nothing is ever truly settled.