Cryptocurrency exchange FTX has reached an agreement with Bybit, concluding a year-long legal battle for $228 million. This will help FTX recover lost assets and pay off debts.
From $953 Million to $228 Million
The original lawsuit against Bybit, filed in late 2023, sought to recover approximately $953 million. FTX accused Bybit's investment arm, Mirana, of receiving preferential treatment, allowing it to withdraw nearly $500 million before FTX halted withdrawals. This allegedly reduced available funds for FTX's other customers. The dispute escalated with claims of Bybit restricting FTX's access to its assets on the platform. The final settlement amount is significantly lower but offers significant savings for FTX's bankruptcy estate.
Implications of the Settlement
The settlement allows FTX to reclaim $175 million in cryptocurrency from Bybit's accounts. FTX plans to sell over 105 million BIT tokens held by Mirana, valued at around $52.7 million. Customers who withdrew funds before FTX's bankruptcy can claim 75% of their balance as of the petition date. Over 94% of creditors voted for the company's reorganization plan, approved by the District of Delaware Bankruptcy Court.
Legal Complexities
Parallel to the settlement with Bybit, FTX is advancing the confirmation of Genesis's reorganization plan. FTX's original claims against Genesis amounted to $3.88 billion, covering loan repayments and withdrawn assets. The agreement with Bybit is a strategic move amid legal uncertainties.
The settlement with Bybit enables FTX to recover substantial funds in its bankruptcy process and repay its customers and creditors, marking a critical step in the company's reorganization.
