Imagine a house of cards tumbling down, each piece dragging others into the abyss. That’s the crypto world after the FTX collapse—a domino effect that’s still rippling through the industry. At the heart of this chaos lies a staggering $1.53 billion claim from Three Arrows Capital (3AC), a once-mighty hedge fund now clawing back assets from the wreckage of the fallen exchange.
The FTX Implosion and Its Lasting Echoes
The downfall of FTX wasn’t just a blip on the radar—it was a seismic event that shook the foundations of cryptocurrency. Billions vanished, trust eroded, and companies like Three Arrows Capital found themselves caught in the crossfire. What began as a liquidity crisis has morphed into a legal battlefield, with 3AC’s latest move spotlighting the messy aftermath.
A Hedge Fund’s Fall from Grace
Three Arrows Capital was once a titan in the crypto space, managing vast sums and riding the bullish waves of 2021. But by June 2022, it crumbled under the weight of overleveraged bets and market turmoil. Its bankruptcy filing marked the start of a desperate scramble to salvage what remained.
Enter FTX. Before its own demise, the exchange held significant assets for 3AC—assets that became a lifeline for the hedge fund’s liquidators. Initially, they claimed $120 million, a modest sum compared to what they’d later demand. The story took a dramatic turn in November 2024, when that figure ballooned to $1.53 billion.
The delay in amending the claim stemmed largely from the debtors’ own inaction.
– Chief Judge John Dorsey
The $1.53 Billion Bombshell
Why the massive jump? The liquidators argue that FTX held $1.53 billion in 3AC assets, which were liquidated in 2022 to offset $1.33 billion in liabilities. They accuse FTX of breaching contracts, unjustly enriching itself, and failing its fiduciary duties—serious allegations that could rewrite the narrative of this saga.
FTX’s team didn’t take this lying down. They fired back, calling the original claim vague and the amendment untimely. But on March 13, 2025, Chief Judge John Dorsey ruled in favor of 3AC, allowing the $1.53 billion claim to stand. His reasoning? The delay wasn’t 3AC’s fault—FTX dragged its feet on sharing critical records.
The judge’s ruling marks a pivotal moment, potentially unlocking billions for 3AC’s creditors—if the funds can ever be recovered.
Unpacking the Legal Victory
Dorsey’s decision wasn’t just a win for 3AC—it was a masterclass in legal nuance. He noted that the initial $120 million claim provided “sufficient notice” and left room for adjustment once more data surfaced. This flexibility could set a precedent for other crypto bankruptcy cases.
For 3AC, it’s a glimmer of hope in a bleak landscape. The hedge fund’s liquidators are also chasing $1.3 billion from Terraform Labs, tied to the Terra collapse. Each victory brings them closer to repaying creditors who’ve been left in limbo since 2022.
- Initial Claim: $120 million in 2022.
- Amended Claim: $1.53 billion in November 2024.
- Ruling Date: March 13, 2025.
FTX’s Counteroffensive
While 3AC celebrates, FTX isn’t sitting idle. The exchange has launched its own recovery efforts, targeting firms like SkyBridge Capital and even Binance in a flurry of lawsuits filed in November 2024. These moves signal a broader fight to claw back funds and stabilize its own liquidation process.
The irony? FTX’s former CEO is still making noise from behind bars, insisting he’s no criminal. Yet the legal entanglements keep piling up, with no end in sight. This clash of titans underscores a brutal truth: in crypto, even the losers keep fighting.
The Bigger Picture: Crypto’s Fragile Ecosystem
Zoom out, and the FTX-3AC saga is a microcosm of crypto’s volatility. One exchange’s failure can drag down hedge funds, lenders, and retail investors alike. The $1.53 billion claim isn’t just about money—it’s about trust, accountability, and the future of decentralized finance.
Experts warn that without tighter oversight, these collapses could repeat. Yet the industry resists regulation, clinging to its ethos of freedom. It’s a high-stakes gamble, and the fallout from FTX proves how much is on the line.
| Entity | Claim Amount | Target |
|---|---|---|
| Three Arrows | $1.53B | FTX |
| Three Arrows | $1.3B | Terraform Labs |
What’s Next for 3AC and FTX?
The judge’s ruling is a stepping stone, not a finish line. For 3AC, securing $1.53 billion hinges on FTX’s ability—or willingness—to pay. With the exchange mired in its own disputes, that’s far from guaranteed. Creditors on both sides are watching closely.
Meanwhile, the crypto community braces for more shocks. Each lawsuit, each claim, peels back another layer of an industry built on ambition and risk. Will 3AC rise from the ashes, or will FTX’s shadow bury it for good?
Key Takeaways
- 3AC’s $1.53 billion claim against FTX was upheld on March 13, 2025.
- FTX’s delays in sharing records fueled the legal win for 3AC.
- The ruling highlights the fragility of crypto’s interconnected web.
This isn’t the end of the story—just a chapter in a saga that’s rewriting crypto’s rulebook. As billions hang in the balance, one question looms: who will emerge from the rubble, and at what cost? The answer might redefine the industry for years to come.
Explore the chaos, the claims, and the courtroom drama that keep crypto on edge.
