The legal fallout from the 2022 crypto crash is far from over, as FTX and Three Arrows Capital (3AC)—two of the industry’s most infamous casualties—are now locked in a high-stakes courtroom clash. At the heart of the dispute is a $1.53 billion claim that 3AC has filed against FTX, alleging improper liquidation of its assets. But FTX is pushing back hard, calling the claim “baseless,” inflated, and an attempt to shift blame for its own risky decisions.

Filed in a Delaware bankruptcy court, FTX’s objection outlines a detailed rebuttal, arguing that 3AC’s numbers don’t add up—and that the troubled hedge fund is responsible for its own collapse.

FTX: 3AC Knew the Risks and Lost

In its filing, FTX accuses 3AC of making highly speculative, leveraged bets during one of the most volatile periods in crypto history. Rather than managing risk, the firm doubled down, hoping for a continued bull run. When the market turned in 2022, those risky positions were wiped out. Now, FTX says, 3AC is attempting to rewrite history and offload its losses onto the FTX estate and its creditors.

Specifically, 3AC’s claim is based on the state of its FTX account as of June 12, 2022, when it alleges that FTX held and later liquidated $1.53 billion worth of assets. FTX, however, disputes that figure on multiple grounds. According to FTX’s legal team, 3AC’s actual crypto balance was around $1.02 billion, with liabilities totaling $733 million. In addition, FTX notes that 3AC had already withdrawn $60 million before any liquidation took place.

After accounting for market declines and existing liabilities, FTX argues that only $284 million in net value remained, casting serious doubt on the validity of 3AC’s billion-dollar claim.

The Liquidation Was Contractual — and May Have Helped

Another key point in FTX’s defense is the nature of the liquidation itself. The estate states that it only liquidated $82 million of 3AC’s assets and did so under pre-agreed credit and margin terms. FTX goes a step further, claiming that the liquidation was not only legal but may have been beneficial for 3AC at the time.

By converting unstable crypto holdings into fiat currency, FTX argues, it actually protected a portion of 3AC’s capital from further loss during the market crash. In a broader sense, this paints the liquidation not as predatory, but as a damage-control measure that fell well within the scope of the companies’ agreements.

Legal Battle Far From Over

3AC now has until July 11 to formally respond to FTX’s objection, with the next court hearing scheduled for August 12. The dispute is just one of several involving both firms as they try to untangle their financial messes and return value to creditors.

While FTX is aggressively seeking to recover funds through dozens of lawsuits, 3AC is simultaneously pursuing a $1.3 billion claim against Terraform Labs, another major player whose collapse rocked the crypto world in 2022.

Meanwhile, FTX founder Sam Bankman-Fried, who was convicted of fraud earlier this year, is now serving a 25-year prison sentence, with a scheduled release date in 2044.

A Cautionary Tale of Crypto Excess

This courtroom drama underscores just how chaotic and interconnected the 2022 crypto collapse truly was. Billions of dollars evaporated almost overnight as firms like FTX and 3AC—once seen as pioneers—were exposed for overleveraging, underestimating risk, and failing to implement proper controls.

For creditors and former customers, the fight for restitution remains tangled in years of litigation. The FTX-3AC case highlights not just the complexity of unwinding bankrupt firms, but also the finger-pointing that follows massive financial failure.

Final Thoughts

As the crypto industry works to rebuild its credibility, the FTX vs. 3AC battle serves as a harsh reminder of the dangers of unchecked risk and poor transparency. With billions still at stake and trust in the system hanging in the balance, how courts rule on cases like this one could influence how future crypto regulations are shaped.

For now, the industry—and its investors—will be watching closely as this heavyweight legal fight plays out.