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Crypto's Bankrupt Blow-Ups Attempt Clawbacks
Three Arrows Capital and Celsius are filing new lawsuits to recover funds.
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Bankrupt crypto projects like Three Arrows Capital and Celsius are suing their former counterparties to recover funds.
What’s the scoop?
- 3AC’s Legal Action: 3AC’s liquidators are seeking $1.3B from TerraForm Labs for alleged market manipulation of TerraUSD (UST) and Luna (LUNA) tokens, leading to significant losses for 3AC.
- Allegations Against TerraForm Labs: The liquidators allege that TerraForm artificially inflated the value of UST and LUNA, which led 3AC to make substantial investments that ultimately collapsed when the market crashed.
- Celsius vs. Tether: Bankrupt crypto lender Celsius is suing Tether for $3.3B, alleging fraudulent practices in securing preferential treatment during Bitcoin collateral liquidation, harming Celsius's creditors.
- Bitcoin Liquidation Dispute: Celsius argues that Tether liquidated Bitcoin collateral at below-market prices during Celsius's collapse. The lawsuit seeks to recover these funds for the benefit of Celsius’s creditors.
Bankless Take:
The trend of 2022's class of bankrupt projects suing to recover lost funds is in full swing, particularly with Celsius, which recently filed a complaint against international depositors who withdrew shortly before the lender declared bankruptcy in an attempt to claw back the assets withdrawn. Regardless, these suits further cast Celsius and 3AC in a bad light, giving the impression of disgraced projects looking to blame others for their own mistakes, regardless of the validity of their claims.