The missing $1.Five billion may additionally still not have been enough for 3AC to cover creditor claims earlier than the $10 billion crypto hedge fund’s disintegrate in 2022, Nansen analysts told Cointelegraph.
Newly revealed court docket files show that FTX secretly liquidated $1.53 billion in Three Arrows Capital (3AC) property just two weeks before the hedge fund collapsed in 2022. The disclosure challenged previous narratives that 3AC’s downfall was entirely market-driven.
Once valued at over $10 billion, 3AC collapsed in mid-2022 after a chain of leveraged directional trades turned sour. The hedge fund had borrowed from over 20 huge establishments earlier than the May 2022 crypto crash, which noticed Bitcoin
BTC
$84,004
fall to $sixteen,000.
However, these days-discovered evidence indicates that the FTX trade liquidated $1.53 billion well worth of 3AC’s property just two weeks ahead of the hedge fund’s disintegrate.
3AC “asked a bankruptcy court docket to permit it growth its claim in opposition to FTX from $one hundred twenty million to $1.Fifty three billion,” according to “Mbottjer,” the pseudonymous co-founder of FTX Creditor, a set FTX lenders and financial ruin claim shoppers.
“3AC says it simplest lately observed evidence that FTX liquidated $1.53B of 3AC’s belongings simply two weeks before 3AC itself went into liquidation, plenty more than the $120M originally claimed,” they stated.
The crypto hedge fund claims it turned into never notified of those liquidations because of FTX’s own bankruptcy court cases. A courtroom dominated that 3AC acted in suitable faith, permitting it to pursue its full $1.53 billion claim in FTX’s bankruptcy case.
On Dec. 21, 2023, a British Virgin Islands courtroom iced over $1.14 billion well worth of 3AC co-founder Kyle Davies and Su Zhu’s belongings. Teneo has when you consider that expected that 3AC lenders are nevertheless owed more or less $3.Three billion following the hedge fund’s disintegrate in 2022.
Davies claimed that allegations from Teneo — the corporation in fee of 3AC’s liquidation — that he and co-founder Su Zhu have been “now not cooperating” have been exaggerated.
Missing $1.5 billion now not enough to keep away from 3AC fall apart
While the $1.Fifty three billion sum is substantially larger than FTX’s previously disclosed liquidations, it is able to no longer had been sufficient to keep 3AC from financial disaster, in line with Nicolai Sondergaard, research analyst at Nansen:
“From what I can see, even supposing they in 2022 had the additional $1.Five billion they nonetheless might now not were capable of meet creditor claims/debt repayments.”
“Without being a felony expert, it seems to me that 3AC, at the same time as being allowed to pursue a much large amount, possibly won’t get the overall $1.53 billion declare. It seems sensible that they will get more, but how an awful lot is uncertain,” the analyst introduced.
“I am curious if FTX had anything to do with the LUNA/UST crash/depeg in May 2022,” Zhao stated in a March 14 X post.
The disintegrate of 3AC took place a month after that of Terraform Labs’ Terra
LUNC
$zero.00006246
and TerraClassicUSD
USTC
$0.01261
tokens and soon earlier than crypto lender Celsius paused all consumer withdrawals after its native token Celsius
CEL
$0.1029
dropped ninety%.
