Three Arrows Liquidators Seek $1.3 Billion Over 2022 Luna Crash

Liquidators for the failed cryptocurrency hedge fund, Three Arrows Capital, are seeking at least $1.3 billion from TerraForm Labs Pte., the bankrupt digital assets business co-founded by Do Kwon, for losses the fund suffered following the 2022 crash of his related TerraUSD and $Luna tokens. TerraForm induced Three Arrows to purchase $Luna and TerraUSD by manipulating the market for these tokens “in a manner that artificially inflated the price for the assets” before they were wiped-out, the liquidators said in court papers. The crash not only wiped out Three Arrows’ investment in those tokens but caused substantial losses in its other holdings, they said.