The ongoing bankruptcy dispute between FTX and Three Arrows Capital escalated on July 1, 2024, when FTX filed court documents rejecting 3AC's $1.53 billion claim. According to Delaware bankruptcy court records, FTX asserted that 3AC's account value plummeted to $284 million by June 12, 2022—comprising $1.017 billion in digital assets and negative $733 million USD cash balance—due to market crashes and 3AC's withdrawals, not FTX's actions. This legal battle stems from June 2022 when 3AC collapsed during the Terra/LUNA implosion, triggering a contagion that bankrupted Voyager, Celsius, and BlockFi within weeks. FTX's lawyers emphasized that 3AC's liquidation of $82 million in crypto assets on June 14, 2022, actually benefited the fund. The court previously approved 3AC's claim expansion from $120 million after finding insufficient evidence for FTX's loan justification. This clash occurs amid FTX's estate distributing $5 billion to creditors since May 2024, with a critical hearing scheduled for August 12 following 3AC's July 11 objection deadline. The timing reignites scrutiny of mid-2022's crypto carnage, where Bitcoin crashed 55% from $31,500 to $17,600 between June 1-18 according to CoinMarketCap data, erasing $450 billion in market capitalization industry-wide.\n\nFor crypto traders, this legal confrontation presents tangible market risks and cross-asset implications. A ruling favoring 3AC could force FTX's estate to liquidate additional crypto holdings, potentially flooding markets. Historical data shows FTX-linked transactions impacted prices: when FTX moved $1.9 billion in SOL to exchanges in May 2024, Solana dipped 12% within 48 hours per CoinGecko. Crypto-related stocks exhibit sensitivity to such developments—Coinbase shares dropped 8% on June 14, 2022, mirroring Bitcoin's 15% single-day crash during initial 3AC liquidations. Current correlation stands at 0.82 between COIN and BTC according to TradingView data. Institutional flows could shift if creditors receive distributions; Galaxy Digital reported $3.8 billion moved from crypto to money-market funds during Q2 2022 contagion. Key dates to monitor include July 11 for 3AC objections and August 12 hearing, coinciding with Bitcoin ETF option expiries that may amplify volatility. Traders should watch BTC, ETH, and SOL pairs for abnormal volume spikes, particularly on Binance and Kraken where FTX estate previously executed large orders.\n\nTechnical indicators reveal persistent vulnerability in crypto assets tied to bankruptcy overhangs. On-chain data from Glassnode shows exchange inflows spiked to 90-day highs during FTX's May distributions, correlating with Bitcoin's drop below $67,000. Current open interest for BTC perpetual swaps sits at $34.2 billion—near March 2024 peaks—indicating leveraged vulnerability to liquidation cascades. Historical volatility patterns suggest August hearings could trigger 30%+ price swings; during June 12-18, 2022, BTC's daily volatility hit 8.2% versus 2024's average 2.1%. Volume analysis shows altcoins remain especially exposed: when Genesis liquidated $1.3 billion in GBTC shares in January 2023, altcoin volumes plunged 40% versus Bitcoin's 22% drop. Critical support levels include BTC’s $64,500 (200D MA) and ETH’s $3,200 (volume-weighted average price since FTX distributions). Traders should track Coinbase order books for institutional sell pressure and CME gap fills at $60,000. Market correlations with tech stocks (NDX) remain elevated at 0.75, meaning NASDAQ swings above 1% typically trigger 2.3x amplified crypto moves within 4 hours per Kaiko research.