Stout served as an expert advisor to Latham & Watkins in the high-profile cross border insolvency proceedings involving Three Arrows Capital (3AC) and FTX, providing independent expert analysis on insolvency and non-ordinary course trading issues central to the dispute.

The engagement focused on evaluating whether 3AC was insolvent during the relevant period and whether its trading activity on the FTX platform deviated materially from ordinary-course behavior under applicable bankruptcy standards. This work endeavored to foray into the unprecedented subject matter area of establishing ordinary course for these complex digital asset companies. The matter involved the analysis of highly complex, high-frequency digital asset transactions executed during periods of extreme market stress, including the June 2022 crypto market dislocation.

Leveraging advanced statistical, behavioral, and forensic analytics, we reconstructed 3AC’s trading activity, exposures, and liabilities using transaction-level data across spot and derivatives markets. The analysis incorporated trading cadence, order size distributions, urgency metrics, position-closing behavior, cross-exchange comparisons, and liability repayment patterns to distinguish ordinary trading behavior from distressed, non-routine activity. These quantitative findings were benchmarked against multiple historical stress events and broader market conditions to isolate exchange-specific anomalies.

Our work supported expert reports, depositions, and court filings, providing data-driven evidence on insolvency and non-ordinary course conduct in one of the most significant digital asset bankruptcy cases to date.