Three Arrows Capital liquidators seek at least $1.3 billion in damages from Terraform Labs over Luna collapse

According to Bloomberg News on August 13, the liquidator of bankrupt crypto hedge fund Three Arrows Capital is seeking at least $1.3 billion in compensation from TerraForm Labs to make up for the losses suffered by the fund after the collapse of TerraUSD and Luna tokens in 2022. The liquidator stated in court documents that before the collapse of these tokens, TerraForm manipulated the market and artificially raised the prices of these assets, inducing Three Arrows to buy Luna and TerraUSD. The token collapse not only resulted in Three Arrows losing all of their investment in these tokens, but also caused significant losses in other investments.The liquidator stated that Three Arrows Capital purchased Luna worth $190 million in January 2022. A few months later, the massive sell-off of TerraUSD caused the value of the tokens and Luna to plummet. According to court documents, as of the end of April 2022, Three Arrows held Luna worth approximately $462 million, but by May 14, the value of the holdings had plummeted to slightly over $2,700. At the same time, the net value of Three Arrows Capital's other digital assets plummeted by approximately $858 million.