FTX Rejects Three Arrows Capital’s $1.5B Claim Over Trading Losses

FTX pushes back against 3AC’s billion-dollar claim

Collapsed crypto exchange FTX has formally rejected Three Arrows Capital’s (3AC) $1.53 billion claim, arguing that the hedge fund’s risky trading strategy caused its own losses and that creditors should not bear the cost.

In a filing submitted on Friday to the U.S. Bankruptcy Court for the District of Delaware, FTX lawyers argued that 3AC “bet big” on a market upswing that never came. When crypto prices crashed in 2022, the fund was exposed, leading to its eventual collapse.

FTX’s legal team stated, “The joint liquidators ask this court to force other exchange customers and creditors to foot the bill for 3AC’s failed strategy by asserting illogical and baseless claims for $1.53 billion.”

Account balance disputes and legal objections

The dispute centers around how 3AC calculated the $1.53 billion figure. FTX’s lawyers argue the liquidators used inaccurate account balances from June 12, 2022. According to FTX, 3AC’s crypto balance was $1.02 billion—not $1.59 billion—and its U.S. dollar liability was $733 million, not $1.3 billion.

FTX claims the true available balance was just $284 million, further reduced by market declines and 3AC’s own $60 million in withdrawals. The objection also counters 3AC’s “lost asset theory,” stating it falsely assumes recovery is owed for nearly all balances held on that single date.

Furthermore, FTX maintains that it liquidated only $82 million worth of crypto, a move it says the firm’s agreements allowed in order to maintain balance requirements. According to FTX, it then converted that amount into fiat and credited it to 3AC’s account, helping preserve the asset’s value.

Legal proceedings ahead

The next steps in the case will include a reply from 3AC, due by July 11, and a non-evidentiary hearing scheduled for August 12 before Chief Judge Karen Owens.

The outcome could affect similar cases involving bankrupt crypto firms, including both FTX and 3AC’s efforts to reclaim losses from other collapsed platforms. Three Arrows Capital is also pursuing a $1.3 billion claim in Terraform Labs’ bankruptcy case, while FTX continues a series of lawsuits as part of its broader recovery efforts.

What Has Happened So Far

• June 2023: 3AC filed an initial $120M claim in FTX’s bankruptcy.
• November 2024: Claim increased to $1.53B, citing breach of duty and unjust enrichment.
• March 2025: Judge John Dorsey allowed 3AC’s motion to compel FTX to share data.