The protracted legal aftermath of the 2022 cryptocurrency market downturn continues to unfold, with bankrupt exchange FTX moving to dismiss a substantial $1.53 billion claim filed by the liquidators of Three Arrows Capital (3AC). This pivotal action further intensifies the complex financial reconciliation between two of the most prominent collapsed entities in the crypto space, highlighting the extensive liabilities stemming from the ecosystem’s implosion.
Escalating Legal Battle: FTX vs. Three Arrows Capital
At the heart of the dispute, 3AC’s liquidators allege that FTX unlawfully seized funds from the hedge fund’s accounts, a move they contend critically accelerated its ultimate collapse. The claim, originally filed for $120 million in 2023, saw a significant escalation to $1.53 billion following court approval in March 2025.
FTX, however, vehemently refutes these allegations, characterizing the lawsuit’s foundation as an “unsubstantiated premise, inaccurate figures, and blindness to real facts.” FTX’s legal team asserts that 3AC’s demise was a direct consequence of its own “risky and failed strategy,” rather than any actions taken by FTX. The exchange further contends that the $1.53 billion figure is fundamentally inaccurate, positing that it was derived from questionable data related to account balances as of June 12, 2022.
The Core of the Dispute: Liquidation Allegations and Contractual Breaches
While FTX does admit to liquidating approximately $82 million, it firmly argues that this action was explicitly permitted under a credit line extended to 3AC. FTX alleges that 3AC violated its contractual agreements when its account balance plummeted below $240 million in the wake of the TerraUSD (UST) stablecoin collapse. According to FTX’s filing, 3AC reportedly disregarded a request for action and subsequently withdrew $18 million in Ethereum, prompting FTX to liquidate the position to prevent a negative balance.
FTX’s stance is that the liquidators are, in effect, attempting to shift the burden of 3AC’s strategic failures onto other clients and creditors.
Path Forward: Key Dates in the Legal Proceedings
This high-stakes legal battle, extensively documented through filings obtained from Kroll, is actively progressing through the judicial system. Three Arrows Capital’s liquidators are mandated to file their response to FTX’s dismissal motion by July 11, 2025. A pivotal hearing on this intricate matter is currently slated for August 12, 2025.
Blockchain developer and writer, Daniel combines hands-on coding experience with accessible storytelling. He holds multiple blockchain certifications and authors technical explainers, protocol deep-dives, and developer tutorials to help readers navigate the intersection of code and finance.