# Crypto's Bankrupt Blow-Ups Attempt Clawbacks

*Author: David Christopher*
*Published: Aug 13, 2024*
*Source: https://www.bankless.com/cryptos-bankrupt-blow-ups-attempt-clawbacks*

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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](https://decrypt.co/244427/three-arrows-capital-liquidators-file-1-3-billion-claim-against-terraform-labs) 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](https://www.coindesk.com/policy/2024/08/12/tether-to-fight-celsius-33-billion-shakedown-litigation/), 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 ](https://globalrestructuringreview.com/article/white-case-and-ask-advising-celsius-files-more-1600-clawback-suits)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who withdrew shortly before the lender declared bankruptcy in an attempt to claw back the assets withdrawn.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. 
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