FTX, the bankrupt cryptocurrency exchange, has finalised a settlement with Bybit, resolving a lawsuit that emerged amid its significant financial collapse in 2022. This settlement allows FTX to recover approximately $228 million, crucial for repaying creditors.
Details of the Settlement
Under the terms of the agreement, FTX’s liquidation estate will retrieve about $175 million in cryptocurrencies held in Bybit accounts. Furthermore, FTX plans to sell over 105 million BIT tokens valued at approximately $52.7 million, which are held by the investment firm Mirana. Notably, defendants who transferred funds out of FTX before its bankruptcy can recover 75% of their account balances.
FTX’s lawsuit, initiated in November 2022, accused Bybit of misusing VIP access to withdraw substantial amounts from the platform just before the exchange’s collapse. FTX also alleged that Bybit obstructed efforts to withdraw assets, effectively holding them “hostage.”
Recent Developments
The settlement follows a series of significant moves by FTX, now led by bankruptcy expert John J. Ray III. Recently, over 94% of FTX’s creditors approved a reorganisation plan, praised by US Bankruptcy Judge John Dorsey as a benchmark for complex Chapter 11 cases. The approved plan includes multiple settlements prioritising customer repayments from recovered assets.
Statements from the Involved Parties
In a recent court filing, FTX officials detailed their extensive negotiations leading to the settlement. This decision highlights the ongoing challenges in the cryptocurrency sector, as exchanges and related entities navigate a complex legal landscape in the aftermath of significant financial turmoil.
Conclusion
The $228 million settlement marks a pivotal step for FTX as it works to recover from bankruptcy and repay creditors. As the cryptocurrency market continues to evolve, this case underscores the importance of transparent operations and trust among trading platforms.
