FTX has concluded a lengthy lawsuit against crypto exchange Bybit, reaching a settlement of $228 million. This allows FTX to recover some lost assets after the 2022 crypto crash.
From $953 Million to $228 Million
The original lawsuit, filed in late 2023, sought to reclaim approximately $953 million from Bybit. FTX accused Bybit’s investment arm, Mirana, of receiving preferential treatment, allowing it to withdraw nearly $500 million right before FTX halted withdrawals. This allegedly reduced available funds for FTX’s other customers. Despite the final settlement amount being lower, it represents a win for FTX's creditors.
Implications of the Settlement
The settlement allows FTX's liquidation estate to reclaim $175 million in cryptocurrencies from Bybit accounts. As part of the agreement, FTX plans to sell over 105 million BIT tokens held by Mirana, valued at around $52.7 million. Additionally, customers who withdrew funds before FTX's bankruptcy will still be eligible to claim 75% of their aggregate balance as of the petition date.
Legal Complexities
In parallel court proceedings, FTX’s legal team highlighted that this settlement paves the way for the confirmation of Genesis's chapter 11 reorganization plan. FTX’s original claims against Genesis amounted to $3.88 billion, covering loan repayments made by its hedge fund arm, Alameda Research. Bybit's settlement also serves as a strategic move, allowing the company to focus on recovery.
The settlement with Bybit and FTX’s reorganization plan emphasize the importance of structured legal agreements in navigating crises, helping to restore financial stability after a crash.
