FTX will pay a $228 million settlement in ByBit lawsuit

The FTX bankruptcy estate has reached a $228 million deal with cryptocurrency exchange Bybit and its investment company Mirana to recoup assets for its creditors.

As part of the settlement of its lawsuit against the Bybit exchange, the FTX bankruptcy estate has agreed to pay $175 million in digital assets and $53 million in BIT tokens. The lawsuit was first filed in a Delaware court in November 2023, and FTX’s initial goal was to recover approximately $1 billion from Bybit and its affiliate Mirana.

Shortly before FTX’s demise in November 2022, FTX accused the companies of taking advantage of their “VIP” status to withdraw approximately $327 million. According to FTX’s advisors, Mirana added pressure on employees to expedite withdrawal requests so they wouldn’t have to wait as long as regular users did.

The lawsuit also sought a Mirana executive and others headquartered in Singapore who were thought to have profited from these transactions.
The FTX bankruptcy estate’s lawyers contended that Mirana and other entities were granted priority withdrawal access because of their purported close relationships with FTX leaders. In an internal database, documented transactions showed Mirana withdrew substantial funds even after FTX suspended withdrawals for other customers on November 8, 2022.

The settlement hearing is now planned for November 20, 2024, if accepted, FTX will be able to sell Mirana some $52.7 million worth of BIT tokens and recover $175 million in digital assets held on Bybit’s platform.

Even though their allegations were valid, FTX’s attorneys admitted that more litigation would be “time-consuming and expensive.” According to the filing, the legal settlement enables FTX to reclaim a significant portion of the assets.

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Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 15 years of working experience in investment trading.

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