3AC files lawsuit against FTX executives

The FTX saga continues to serve up new episodes as 3AC filed a new lawsuit against Sam Bankman-Fried (SBF), Ryne Salame and Caroline Ellison. 

The allegations run along the lines of illegal liquidations and insider trading, with SBF’s deposition expected to occur in October at the Federal Correctional Institution in Terminal Island, California, where he is currently being held.

3AC files lawsuit against FTX executives

According to a legal notice filed in the US Bankruptcy Court for the District of Delaware on September 9, 3AC’s joint liquidators, Russell Crumpler and Christopher Farmer, plan to depose Bankman-Fried under Rule 45 of the Federal Rules of Civil Procedure.

The move comes after 3AC co-founder Zhu Su accused Bankman-Fried of liquidating $1.5 billion of their positions without proper justification.

Ryne Salame was accused of using insider information to front-run trades against client positions, which resulted in a cash out of over $1 billion before the FTX collapse.

Ellison, who ran Alameda Research during the time of the alleged actions, is also expected to be questioned over the interconnected trading and liquidation strategies that may have pushed 3AC into insolvency.

The subpoenas are part of broader recovery efforts being made following the bankruptcies of both FTX and 3AC. The court cases have been relentless, but despite efforts, billions in investor funds remain unaccounted for, forcing liquidators to intensify efforts to investigate the former executives.

Bankman-Fried is expected to give a testimony that will reportedly be recorded via video and stenographic means and subject to prison protocols. However, only time will tell if these proceedings will lead to additional criminal referrals or civil claims.

FTX is set to start the next round of cash distributions

According to Cryptopolitan’s report, the next round of FTX’s cash distributions to creditors will begin on or around September 30, 2025. The record date for eligible claimants was set for August 15.

The payments will reportedly be processed via FTX’s designated distribution partners, including BitGo, Kraken, and Payoneer. It started repaying creditors earlier this year after securing court approval for its redistribution plan, and to date, has returned approximately $6.2 billion.

The once dominant exchange in the crypto space collapsed in November 2022 following a liquidity crisis triggered by revelations about its balance sheet.

The fallout from that crisis implicated founder Sam Bankman-Fried. He was sentenced in 2023 to 25 years in prison for the role he played in defrauding customers and investors of more than $11 billion.

He has been fighting to get out ever since, and all things being equal, is now expected to gain his freedom on December 14, 2044, after serving less than 21 years of his 25-year sentence for fraud tied to the FTX collapse for good behavior.

The former CEO, who was also fined over $11 billion and records, is currently being held at a transfer facility in Oklahoma following nearly two years behind bars.

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