The FTX bankruptcy estate has secured a $228 million settlement with cryptocurrency exchange Bybit and its investment arm, Mirana, as part of its ongoing efforts to recover assets for creditors.
In a filing dated October 24, the estate announced that it would receive $175 million in digital assets and an additional $53 million in BIT tokens from Bybit. This agreement comes after FTX initially sought to reclaim approximately $1 billion from Bybit and Mirana through a lawsuit filed in Delaware in November 2023.
FTX accused the companies of taking advantage of their “VIP” status to withdraw around $327 million just before the exchange’s collapse in November 2022. Advisors for FTX alleged that Mirana pressured employees to expedite withdrawal requests, circumventing the delays faced by regular users.
The lawsuit also implicated individuals believed to have benefitted from these transactions, including associates in Singapore and a Mirana executive. FTX’s legal team argued that Mirana and others were granted priority access to withdrawals due to their close relationships with FTX executives. Internal records indicated that Mirana managed to withdraw significant amounts even after FTX halted withdrawals for other users on November 8, 2022.
A hearing to finalize the settlement is set for November 20, 2024. If approved, it will enable FTX to reclaim $175 million in digital assets held on Bybit’s platform and allow for the sale of approximately $52.7 million in BIT tokens to Mirana.
FTX’s attorneys noted that while their claims were valid, continued litigation would be “time-consuming and expensive.” Settling the case will facilitate the recovery of assets without further delays, as outlined in the filing.
This settlement follows the recent approval of FTX’s bankruptcy plan on October 7, 2024, which promises to repay 98% of users about 118% of their claims in cash. Meanwhile, several former executives of the failed exchange have reached plea deals with federal prosecutors in recent months. On September 24, one executive received a reduced sentence of two years in prison due to cooperation with authorities, while FTX’s former CEO, Ryan Salame, was sentenced to 7.5 years in May. Nishad Singh, the former head of engineering, has requested to be exempt from prison time.
Related Topics:
