The FTX bankruptcy restructuring team has recently reached a settlement agreement with the cryptocurrency exchange Bybit, with a settlement amount reaching $228 million. This settlement stems from a lawsuit filed by FTX against Bybit and its affiliated investment arm in 2023. Since the collapse of FTX in 2022, the impact has continued to expand, and these settlement funds will be used to repay affected users and creditors following the FTX collapse. A federal court is also expected to hold a hearing on November 20 of this year to approve the settlement agreement.
Bybit Utilizes “VIP” to Withdraw $327 Million in Advance
In 2023, the FTX bankruptcy restructuring team filed a lawsuit against Bybit exchange and its investment arm Mirana, accusing them of using their “VIP” status at FTX to withdraw approximately $327 million in assets prior to the collapse of FTX in November 2022. Under U.S. bankruptcy law, FTX has the right to reclaim funds withdrawn months before the bankruptcy filing to ensure fair treatment of all creditors.
Settlement of $228 Million Reached, Approval by Federal Court on November 20
Documents indicate that this settlement agreement allows FTX to withdraw digital assets worth $175 million from Bybit and subsequently sell approximately $53 million in BIT tokens to Mirana Corp (Bybit’s investment arm). FTX’s attorneys stated that the bankruptcy team had a strong case in this lawsuit, but continuing litigation would consume a significant amount of time and resources, leading to the decision to settle. This settlement agreement still requires federal court approval, with a hearing scheduled for November 20 at 2 PM EST to approve the agreement. If approved, these settlement funds will be used to repay former users and creditors of FTX.
(Accusations against Bybit for escaping using VIP privileges, FTX restructuring team suing for $953 million)