Liquidators of Defunct Crypto Hedge Fund Three Arrows Capital Pursue $1.3B Claim From TerraForm Labs

Liquidators of the defunct crypto hedge fund Three Arrows Capital are reportedly pursuing a claim of at least $1.3 billion from TerraForm Labs.

Bankrupt crypto hedge fund Three Arrows Capital’s liquidators are reportedly pursuing a claim of at least $1.3 billion from TerraForm Labs.

According to an Aug. 12 report by Bloomberg, the claim is related to losses that 3AC suffered following the 2022 collapse of the TerraUSD (UST) stablecoin and Luna (LUNA) token.

The report states that Teneo, the court-appointed liquidators for 3AC, are accusing TerraForm of manipulating the LUNA and UST markets, artificially inflating their values before their prices crashed.

As quoted by Bloomberg, Teneo stated in court filings that 3AC heavily invested in the two tokens following the alleged manipulation, a decision that ultimately caused 3AC to suffer substantial financial losses.

In addition to the direct losses from the failed tokens, Teneo also alleges that the Terra crash had an adverse impact on other crypto assets held by 3AC.

3AC was once a prominent player in the crypto space, but it collapsed shortly after TerraUSD and Luna crashed, along with several other major crypto firms.

Teneo is also seeking to recover funds from Three Arrows’ founders, Su Zhu and Kyle Davies, among others.

Earlier this year, Davies gave an extensive interview to crypto journalist Laura Shin, where he stated that he was not sorry about his company’s bankruptcy.

3A, which was registered in Singapore, filed for bankruptcy in July 2022 after it failed to meet demands from its creditors following a massive market downturn triggered by the Terra collapse. A year before, it boasted a $10 billion crypto portfolio, with the amount dropping to about $3 billion at the time the company was declaring insolvency.

3AC’s claim against TerraForm Labs is the latest legal development in the organization’s ongoing woes following the implosion of its cryptocurrencies. In June, TerraForm reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission after a jury found the company and its founder, Do Kwon, legally liable for the $60 billion crash.

The SEC had initially sought $5.3 billion in fines from both Mr. Kwon and TerraForm, consisting of $4.7 billion in disgorgement and $520 million in civil penalties.

Do Kwon is currently under house arrest in Montenegro, awaiting extradition to either the United States or South Korea, where he faces lengthy prison sentences over his role in Terra’s fall.

The above is the detailed content of Liquidators of Defunct Crypto Hedge Fund Three Arrows Capital Pursue $1.3B Claim From TerraForm Labs. For more information, please follow other related articles on the PHP Chinese website!