Former FTX executives Sam Bankman-Fried, Caroline Ellison, and Ryan Salame have been called to court to address allegations that FTX unlawfully liquidated Three Arrows Capital's (3AC) multi-billion-dollar position during the 2022 crypto market crash. 3AC claims its account was valued at approximately $1.5 billion and that FTX's forced asset sales accelerated its collapse.
Bankman-Fried, currently imprisoned for fraud and conspiracy, is scheduled to testify under oath on October 14, 2025. Ellison, former CEO of Alameda Research, and Salame, ex-co-CEO of FTX Digital Markets, are also required to provide documents and testimony. The court seeks explanations on whether internal rules were followed during the liquidation and if intentional actions harmed 3AC.
3AC co-founder Zhu Su has publicly accused FTX of misconduct, including misuse of insider information. Salame is alleged to have traded against client positions using customer data, profiting by about $1 billion. These claims add to existing controversies surrounding the bankrupt exchange.
FTX's estate, managed by bankruptcy administrators, disputes 3AC's narrative, stating the account's net value was closer to $284 million after accounting for $733 million in margin debt. The estate claims only $82 million was liquidated under contract terms to mitigate bankruptcy risk, attributing 3AC's losses to market conditions and its own withdrawals.
The outcome of this litigation could influence future exchange practices during market volatility and determine accountability for 3AC's losses.
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