TLDR
- FTX executives have been called to court over the alleged unlawful liquidation of 3AC’s multi-billion-dollar position.
- Sam Bankman-Fried, Caroline Ellison, and Ryan Salame will testify under oath regarding their involvement in the liquidation.
- 3AC claims that FTX mishandled its account, leading to significant losses during the 2022 crypto market crash.
- FTX disputes 3AC’s account, asserting the account value was far lower than claimed and liquidation was necessary to avoid bankruptcy.
- The outcome of the case could have significant legal and financial consequences for FTX executives.
FTX executives face new legal challenges as the bankrupt exchange is accused of unlawfully liquidating Three Arrows Capital’s (3AC) position during the 2022 crypto slump. Former FTX CEO Sam Bankman-Fried, Alameda Research’s Caroline Ellison, and FTX Digital Markets’ Ryan Salame have been summoned to court. The trio is expected to testify under oath regarding the liquidation of 3AC’s multi-billion-dollar position.
FTX Accused of Mishandling 3AC’s Position
3AC claims that FTX mishandled its account, which was valued at $1.5 billion at the time. According to 3AC, FTX forcibly sold off its assets, exacerbating the fund’s collapse. The liquidation allegedly took place amidst the turmoil of the 2022 crypto market crash.
3AC’s accusations center around claims that FTX misused insider information, profiting from the liquidation of its position. Zhu Su, co-founder of 3AC, has publicly blamed FTX for the fund’s failure. He claims that FTX’s actions led to the bankruptcy of his company.
3AC have filed a notice to subponea SBF, Ryne Salame, Caroline Ellison
Sam's disposition will occur on 14 Oct 2025@zhusu has said that Sam liquidated $1.5bn of their positions illegally, and
Ryne Salame used inside info to trade against client positions to cash out $1bn pic.twitter.com/LMr2VzMA2l
— Sunil (FTX Creditor Champion) (@sunil_trades) September 11, 2025
FTX disputes 3AC’s version of events, stating that the account value was far lower than claimed. Company documents suggest that 3AC’s account was worth closer to $284 million after debts were accounted for. The exchange also asserts that only $82 million was sold to reduce bankruptcy risks.
Court Testimony to Shed Light on Liquidation
Sam Bankman-Fried is scheduled to testify under oath on October 14, 2025, while still incarcerated for fraud and conspiracy charges. He will be asked to explain FTX’s role in the liquidation of 3AC’s assets. His testimony could provide crucial details about whether FTX followed internal rules or acted with malintent.
Caroline Ellison and Ryan Salame are also expected to provide documents and testify regarding the liquidation. They will be questioned on how the liquidation process was handled and whether it violated any legal or ethical standards. Their testimony could offer insight into the role that FTX’s leadership played in the downfall of 3AC.
The outcome of the court case may have significant consequences for FTX executives. If found guilty of intentionally liquidating 3AC’s position for personal gain, they could face severe legal and financial repercussions. This case could also influence how crypto exchanges handle large client positions in times of market volatility.
