The battle between fallen giants of the crypto world isn’t over!
Three Arrows Capital (3AC) has subpoenaed former FTX executives, accusing them of illegally liquidating more than $1.5 billion in positions during the 2022 market crash. The move drags Sam Bankman-Fried back into the spotlight, but this time from prison.
What’s happening now? Here are all the details.
A court filing shows 3AC’s liquidators want testimony from Bankman-Fried, Caroline Ellison, and Ryan Salame. If approved, Bankman-Fried will be transported from a California prison to testify under oath on October 14, 2025.
It’s another twist in the story connecting two of crypto’s biggest crashes – 3AC in June 2022 and FTX later that year.
3AC co-founder Zhu Su claims FTX pushed the hedge fund over the edge by force-liquidating $1.5 billion of its positions “without proper authorization.” He argues this illegal move accelerated 3AC’s collapse.
Ellison, who ran Alameda Research, faces scrutiny over trading practices that may have worsened the situation. Salame, a former FTX executive, is accused of using insider information to front-run trades and profiting more than $1 billion.
The FTX estate has rejected 3AC’s accusations. In June 2025, it argued the hedge fund’s account balance was closer to $284 million, not the $1.6 billion claimed.
“FTX creditors should not be a backstop for 3AC’s failed trades,” the estate wrote in a 94-page objection. According to its filings, most of the money vanished during the market crash itself, not because of unlawful action.
FTX says it only liquidated $82 million, well within its rights under contract terms.
While the legal fight heats up, FTX continues repaying creditors. Around $6.2 billion has already been returned since 2022. The next round of cash distributions is scheduled for September 30, 2025, through partners including BitGo, Kraken, and Payoneer.
But not everyone is getting paid. More than 300 Chinese users have challenged the decision to exclude payouts in 49 jurisdictions, calling the restrictions unfair and without legal basis.
Also Read: Could You Lose Your FTX Claim? Payouts May Be Blocked in These 49 Regions
The FTX and 3AC collapses remain two of the biggest failures in crypto history. With subpoenas now targeting top executives, the question of accountability is once again front and center.
October’s deposition of Bankman-Fried could be a turning point for 3AC’s recovery efforts and for how future crypto bankruptcies are handled.
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