The FTX bankruptcy fund and Bybit have reached a 228 million USD settlement, ending the legal dispute related to fund withdrawals before FTX's collapse in 2022.
According to legal filings on October 24, FTX has reached an agreement with Bybit, closing the lawsuit that began in 2023. This agreement allows FTX to recover 175 million USD in digital assets being held at Bybit and sell 53 million USD in BIT tokens to Mirana Corp, Bybit's investment subsidiary.
The initial lawsuit was initiated by FTX to reclaim 1 billion USD, accusing Bybit and Mirana of exploiting their relationship with FTX's leadership to withdraw 327 million USD just before the exchange declared bankruptcy.
FTX's lawyer stated that pursuing the lawsuit to the end would incur significant costs and complexities, despite the allegations being grounded. The reached agreement will benefit both parties if approved by the court at the hearing on November 20, 2024. FTX will recover a significant portion of the illegally withdrawn funds, while Bybit will avoid prolonged legal risks and costs.
Source: Bloomberg Law
The lawsuit against Bybit is just one of many legal disputes that FTX has had to resolve since its collapse in 2022. With Bitcoin and digital asset prices having rebounded strongly since the bankruptcy, asset recovery has become more urgent than ever to compensate creditors.
This agreement comes after FTX’s restructuring plan was approved by Judge John Dorsey on October 7, 2024, marking an important step in the bankruptcy process of the exchange. The agreement not only helps resolve outstanding disputes but also paves the way for debt repayment and operational restructuring.