The FTX bankruptcy estate initially filed a lawsuit against the Bybit exchange in 2023, seeking to recover funds owed to creditors and former clients. On October 24th, in a newly released court filing, FTX announced a proposed $228 million settlement with Bybit. However, the agreement still requires court approval before it can proceed.
Under the settlement terms, FTX would be permitted to sell approximately $53 million in BIT tokens to Mirana Corp, Bybit’s investment division, and withdraw $175 million in digital assets from Bybit. FTX’s legal team noted that even if their claims held merit, pursuing the case further in court would be overly burdensome.
A court hearing is scheduled for November 20, 2024, to finalize the agreement. This follows FTX’s initial November 2023 lawsuit against Bybit and Mirana, demanding $1 billion. FTX alleged that these entities withdrew about $327 million in assets and cash using “VIP” privileges and close connections with FTX executives just before FTX’s collapse. Attorneys for FTX asserted that Bybit and others were granted preferential withdrawal rights during the early stages of FTX’s downfall, documented in a company database.
The prolonged bankruptcy proceedings involved extensive legal battles, including the dispute with Bybit. Meanwhile, FTX investors voluntarily dropped a separate complaint against Sullivan & Cromwell, FTX’s legal representatives in various deals, after Judge John Dorsey approved FTX’s restructuring plan.
