TL;dR
- A bankruptcy court in the U.S. approved the expansion of Three Arrows Capital’s (3AC) claim against FTX, increasing the amount from $120 million to $1.53 billion.
- Judge John Dorsey dismissed FTX’s objections, considering that 3AC’s liquidators provided sufficient evidence and gave proper notice regarding the claim.
- A Texas judge ruled against Bancor DAO for failing to respond to a class-action lawsuit accusing the platform of misleading investors about its liquidity.
A U.S. bankruptcy court has approved the liquidators of Three Arrows Capital (3AC) to expand their claim against the FTX exchange, raising the initial amount of $120 million to a much higher figure, $1.53 billion.
The decision was issued by Judge John Dorsey on March 13 in the U.S. Bankruptcy Court for the District of Delaware, who dismissed the objections of FTX’s debtors. The latter had argued that the modification of 3AC’s claim was inappropriate due to being too late. Despite these arguments, the judge considered that 3AC’s liquidators had provided adequate notice and had sufficient evidence to support their request.
A Blow to FTX Creditors
The expansion of 3AC’s claim is based on allegations of breach of contract, unjust enrichment, and breach of fiduciary duty. According to the liquidators, FTX had liquidated assets totaling $1.53 billion in 2022 to settle debts, which harmed 3AC’s creditors. FTX filed for bankruptcy in November 2022 and has since initiated several lawsuits to recover funds, with the fight to recover funds remaining a priority for all parties involved.
Other Legal Disputes in the Crypto Industry
Meanwhile, another legal matter involves Bancor DAO. A federal judge in Texas ruled against the DeFi platform for failing to respond to a class-action lawsuit. This litigation accuses Bancor of misleading investors about liquidity problems and impermanent loss protection, a mechanism that the platform suspended in 2022 without proper notification. Plaintiffs argue that Bancor did not warn about liquidity issues affecting investors, resulting in substantial losses. They also claim that Bancor’s token functioned as an unregistered security, further aggravating the platform’s legal situation.
In a third case, a Delaware court issued a temporary restraining order in favor of Consensus Colocation, a Bitcoin mining company, in a dispute with Mawson Hosting over access to 21,000 mining rigs. The conflict arose due to accusations of unpaid fees and improper use of the mining equipment. Consensus claims that Mawson began mining with its rigs without proper consent, while Mawson defends its right to do so according to the contractual terms
