FTX seeks to block 3AC’s $1.5B claim, alleges self-inflicted losses

In a 94-page objection filed June 20 in the U.S. Bankruptcy Court in Delaware, lawyers for the FTX Recovery Trust asked the judge to fully disallow 3AC’s claim, calling it “illogical and baseless.”

The dispute centers on how much crypto 3AC actually held on FTX when both firms collapsed in mid-to-late 2022. The hedge fund claims its account balance was nearly $1.6 billion, but FTX says the net value was just $284 million, after subtracting $733 million in margin debt.

The filing argues that 3AC has ignored its liabilities and now wants other creditors to cover losses from a heavily leveraged position. “FTX creditors should not be a backstop for 3AC’s failed trades,” the estate wrote.

Most of the $284 million evaporated over two days in June 2022 as crypto prices fell. Of that amount, $222 million was lost to market declines, and another $60 million was withdrawn by 3AC itself. FTX says it only liquidated $82 million, fully allowed under contract terms, and that doing so helped prevent the account from turning negative.