In a recent legal filing, the FTX bankruptcy estate announced that it has reached a settlement agreement with the Bybit exchange for $228 million. This lawsuit, which was initially filed by the FTX estate in 2023, aimed to recover funds in order to repay former customers and creditors.
According to the terms of the settlement, FTX will be able to withdraw $175 million in digital assets that it holds on Bybit. Additionally, FTX will sell approximately $53 million worth of BIT tokens to Mirana Corp, an investment division of Bybit. The lawyers representing FTX have acknowledged the validity of their claims, but have also noted that pursuing further litigation would be burdensome.
It is important to mention that the settlement agreement still needs to be approved by a court. A hearing to ratify the agreement between the two parties is scheduled for November 20th at 2 PM Eastern Time.
FTX initially filed a $1 billion lawsuit against Bybit and Mirana in November 2023. The lawsuit alleged that these entities took advantage of their “VIP” access and close relationship with FTX executives to withdraw approximately $327 million in digital assets and cash just before FTX’s collapse. Attorneys for the FTX bankruptcy estate argued that Mirana and others were given preferential treatment during the early stages of the collapse, which was documented in a database.
This lawsuit against Bybit is just one of the many legal disputes that the FTX estate and its legal counsel have had to navigate throughout the lengthy bankruptcy proceedings. However, there seems to be some hope for the FTX bankruptcy estate as Judge John Dorsey approved the FTX reorganization plan on October 7th. Following this approval, FTX investors voluntarily dropped their lawsuit against Sullivan & Cromwell, the legal firm that represented FTX in various deals while the company was still operational. A group of FTX creditors had accused the law firm of being complicit in the FTX fraud while benefiting financially from their continued representation of the company.