The liquidator of Three Arrows Capital is seeking at least $1.3 billion in compensation from Terraform Labs

ChainCatcher news, according to Bloomberg, the liquidators of the bankrupt crypto hedge fund Three Arrows Capital are seeking at least $1.3 billion in compensation from TerraForm Labs to cover the losses the fund suffered after the collapse of the TerraUSD and Luna tokens in 2022. The liquidators stated in court documents that before the collapse of these tokens, TerraForm had lured Three Arrows into purchasing Luna and TerraUSD by manipulating the market and artificially inflating the prices of these assets. The collapse of the tokens not only wiped out Three Arrows' investments in these tokens but also caused significant losses in other investments.

The liquidators indicated that Three Arrows Capital purchased $190 million worth of Luna in January 2022. A few months later, a massive sell-off of TerraUSD led to a significant drop in the value of Luna. Court documents show that by the end of April 2022, Three Arrows held approximately $462 million worth of Luna, but by May 14, the value of its holdings plummeted to just over $2,700. Meanwhile, the net worth of Three Arrows Capital's other digital assets shrank by about $858 million.