The FTX bankruptcy estate has finalized a $228 million settlement with the cryptocurrency exchange Bybit and its investment arm, Mirana, as part of ongoing efforts to recover assets for its creditors.
An October 24 court filing revealed that FTX will receive $175 million in digital assets, in addition to $53 million worth of BIT tokens as part of the agreement. This settlement marks a significant reduction from FTX’s initial claim, which sought to recover approximately $1 billion from Bybit and Mirana through a lawsuit filed in Delaware in November 2023.
FTX’s lawsuit accused Bybit and Mirana of taking advantage of their “VIP” status to withdraw approximately $327 million just before FTX’s collapse in November 2022. According to FTX’s advisors, Mirana exerted pressure on FTX staff to fast-track their withdrawal requests, circumventing the withdrawal delays experienced by regular users.
The lawsuit also identified several individuals, including associates based in Singapore and a Mirana executive, who were alleged to have benefitted from these transactions.
FTX’s legal team argued that Mirana and its associates were granted preferential withdrawal access due to their close connections with FTX executives. Internal records indicated that Mirana was able to withdraw substantial funds even after FTX halted withdrawals for all other users on November 8, 2022.
A hearing to finalize the settlement is set for November 20, 2024. If the court approves the agreement, FTX will reclaim $175 million in digital assets from Bybit and sell approximately $52.7 million worth of BIT tokens to Mirana.
FTX’s representatives acknowledged that while their claims were valid, further litigation would be “time-consuming and expensive.” Settling the lawsuit allows FTX to recover some assets without further delay, according to the filing.
The settlement arrives on the heels of FTX’s bankruptcy plan approval on October 7, 2024, which will see the exchange repay 98% of users roughly 118% of their claims in cash.
In recent months, several high-ranking executives from the failed exchange have reached plea agreements with federal prosecutors. Notably, one former executive received a reduced sentence of two years in prison due to cooperation with authorities, which is believed to have been instrumental in exposing the details of the FTX collapse. Meanwhile, FTX digital markets CEO Ryan Salame was sentenced to 7.5 years in May, while former head of engineering Nishad Singh has requested to be spared from imprisonment.
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