- The bankrupt FTX settles the lawsuit against Bybit for $228 million.
- The settlement allows FTX to recover $175 million in funds from Bybit.
- The lawsuit initially sought $953 million from Bybit and two corporate affiliates.
The bankrupt crypto exchange FTX announced a $228 million settlement with Bybit on October 24th, ending a prolonged lawsuit that aimed to recover funds. A legal filing shows the settlement allows FTX to withdraw $175 million in digital assets from Bybit and sell approximately $53 million in BIT tokens to Bybit’s investment division, Mirana Corp.
Back in November 2023, FTX filed a lawsuit against Bybit and two other corporate affiliates, claiming they unfairly profited from FTX. The lawsuit aimed to recover $953 million in funds and assets from FTX, Mirana Corp, and Time Research Ltd. The amount reflects the value of the withdrawn assets on November 1st.
Read also: FTX’s FTT Token Defies Logic, Trading at $2 Despite Bankruptcy
The settlement amount is significantly less than the $953 million FTX originally requested. Defendants who withdrew funds before the bankruptcy will receive creditor claims worth 75% of their account balances.
FTX lawyers admitted further legal action would be difficult, even though they believed their claims were valid. They said:
” Plaintiffs’ claims for turnover, violations of the automatic stay, and fraudulent and preferential transfers are disputed, carry some degree of risk, and in any event would be time-consuming and expensive to further litigate.”
Court Approval Pending for Settlement
The settlement between FTX and Bybit requires court approval, with a hearing scheduled for November 20, 2024, at 2 PM Eastern Time. This is a crucial step to finalize the agreement and make it legally binding.
In the filing, FTX underscored that the settlement saves the debtors’ estates a significant amount of money. The settlement helps to avoid the uncertainty and costs of a long legal battle. FTX said, “Through the settlement agreement, the debtors will be recovering substantially everything that they seek to recover.”
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