FTX agrees to $228m settlement in ByBit lawsuit

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As a seasoned researcher with a keen interest in the dynamic world of cryptocurrency and blockchain technology, I have been closely following the FTX saga. This latest development – the $228 million settlement between FTX and Bybit – is another significant milestone in this intricate tale of rise and fall.

In an effort to recoup funds for its creditors, the FTX bankruptcy administrators have reached a $228 million settlement agreement with both Bybit, a digital currency exchange, and its investment arm, Mirana.

As per a filing dated October 24, the bankruptcy estate of FTX has reached an agreement to resolve its dispute with the Bybit exchange. Under the terms of this settlement, FTX will receive approximately $175 million in digital assets and an additional $53 million worth of BIT tokens.

Originally, FTX aimed to retrieve approximately $1 billion from Bybit and its subsidiary Mirana through a legal action that was first brought in a Delaware court in November 2023.

In November 2022, just before FTX’s bankruptcy, some companies were accused of taking advantage of their “VIP” status to withdraw approximately $327 million. According to FTX’s advisors, Mirana allegedly pressured FTX staff to prioritize and expedite the withdrawal requests of these privileged clients, bypassing the delays faced by ordinary users.

Additionally, the lawsuit aimed at those presumed to profit from these dealings, such as business partners based in Singapore and an executive from Mirana.

Lawyers representing the FTX bankruptcy case assert that Mirana and others were granted preferential withdrawal privileges, supposedly because of their close relationships with FTX’s executives. They traced these transactions in a private database, demonstrating how Mirana was able to withdraw substantial amounts, despite FTX halting withdrawals for other users on November 8, 2022.

As a crypto investor, I’m excited to share that the long-awaited hearing for the settlement is scheduled on Nov 20, 2024. If everything goes as planned, FTX will regain control over approximately $175 million in digital assets kept on Bybit’s platform. Additionally, should this settlement be approved, FTX may liquidate around $52.7 million worth of BIT tokens and transfer the proceeds to Mirana. This development could potentially impact the crypto market, so it’s important for us investors to stay informed and make educated decisions.

FTX’s lawyers admitted that while they held strong arguments, pursuing the lawsuit any further could be both costly and time-consuming. By settling the dispute, FTX can regain some assets swiftly, as indicated in the court documents.

FTX saga nearing an end

After the approval of FTX’s bankruptcy plan on October 7, 2024, the creditors are scheduled to repay approximately 98% of users, offering them around 118% of their original claims in cash.

Over the past few months, various high-ranking officials from the collapsed cryptocurrency trading platform have agreed on plea bargains with federal investigators.

On September 24, District Judge Lewis A. Kaplan handed down a two-year prison term that was reduced as a result of her assistance to the authorities. This collaboration appears to have significantly contributed to the exposure of the FTX scandal.

In May, Ryan Salame, CEO of FTX digital markets, received a 7.5-year prison sentence. On the other hand, Nishad Singh, the exchange’s previous head of engineering, has requested the court for leniency and no imprisonment.

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2024-10-28 10:40