Delaware Court Approves Dramatic Increase in 3AC Claim Against FTX

A Delaware bankruptcy court has approved a significant increase in the claim filed by the failed hedge fund Three Arrows Capital (3AC) against the bankrupt cryptocurrency exchange FTX. The court's ruling allows 3AC to claim $1.53 billion, a substantial rise from the initially filed $120 million.

The legal dispute centers on allegations that FTX liquidated $1.53 billion of 3AC's assets just two weeks prior to 3AC's own collapse in 2022. FTX had argued that the liquidation was necessary to settle a $1.3 billion loan obligation, but the court reportedly found "insufficient evidence" to support this claim.

This decision significantly alters the potential distribution of remaining FTX assets among creditors. FTX's estate had opposed the claim expansion, citing that 3AC's request was submitted too late in the bankruptcy process. The crypto exchange, which began distributing funds to creditors in early 2025, argued that the increased claim would "unfairly delay and disrupt payouts to other creditors."

However, the court determined that 3AC's delay was "justified due to missing financial records and FTX's lack of transparency," which hindered 3AC's liquidators from assessing their full claim earlier.

Prior to their respective collapses, 3AC and FTX were deeply intertwined within the cryptocurrency industry. 3AC, at its peak, reportedly managed over $3 billion in net assets. Its downfall in mid-2022 contributed to a broader market downturn, exposing financial vulnerabilities within Sam Bankman-Fried's FTX empire.

The court's ruling is the latest development in the ongoing legal fallout from the FTX and 3AC failures. Sam Bankman-Fried, the former FTX CEO, is currently appealing his conviction and 25-year prison sentence. 3AC co-founder Zhu Su was sentenced to four months in prison in Singapore for failing to cooperate with liquidators, while his partner, Kyle Davies, has not faced legal repercussions related to the hedge fund's collapse.

The approval of 3AC's increased claim grants the hedge fund a larger share of FTX's remaining assets. However, it also introduces new complexities and potential delays to the already intricate bankruptcy proceedings, potentially impacting creditors awaiting payouts.