- The estate had first sued the exchange in 2023, attempting to recoup monies.
- The court still has to accept the settlement accord before the settlement deal can go through.
In a legal filing made public on October 24th, the FTX bankruptcy estate announced a $228 million settlement with the Bybit exchange. The estate had first sued the exchange in 2023, attempting to recoup monies owed to creditors and former clients.
The filing states that FTX will be able to sell some $53 million worth of BIT tokens to Mirana Corp, an investment arm of the Bybit exchange. And withdraw $175 million worth of digital assets from Bybit as a result of the settlement deal. Even if FTX’s allegations are valid, the company’s lawyers said that taking the matter to court would be too onerous.
Preferential Withdrawal Rights
The court still has to accept the settlement accord. but the two sides have set a hearing on November 20, 2024, to finalize the agreement.
In November 2023, FTX initially sued Bybit and Mirana for $1 billion. Claiming that the entities had pre-emptively withdrawn around $327 million worth of digital assets and cash using their “VIP” access and tight relationship with FTX executives, just before FTX’s final collapse.
Mirana and others were allegedly granted preferential withdrawal rights from the FTX team during the early stages of the collapse, according to attorneys representing the FTX bankruptcy estate. These privileges were recorded in a database.
The years-long bankruptcy processes were fraught with legal conflicts. Including the litigation against Bybit, which the FTX estate and legal counsel for the former exchange had to manage.
Moreover, investors in FTX willingly withdrew their complaint against Sullivan & Cromwell, the law firm that had represented FTX in several transactions while the business was running, when Judge John Dorsey approved the restructuring plan.
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