In an official court document filed on October 24th, the FTX bankruptcy estate has agreed to a settlement of $228 million with the Bybit exchange. This settlement comes as a result of a lawsuit originally filed in 2023 by the FTX estate, which aimed to recover funds in order to repay former customers and creditors.
According to the legal filing, the settlement agreement will allow FTX to retrieve $175 million worth of digital assets currently held by Bybit. Additionally, approximately $53 million worth of BIT tokens will be sold to Mirana Corp, an investment division of the Bybit exchange. Attorneys representing FTX have stated that while they believe their claims are valid, pursuing further litigation would be burdensome.
It is important to note that the settlement deal is still subject to court approval. A hearing to ratify the agreement between FTX and Bybit has been scheduled for November 20, 2024, at 2 PM Eastern Time.
In November 2023, FTX initially filed a $1 billion lawsuit against Bybit and Mirana, alleging 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 the final collapse of FTX. Attorneys representing the FTX bankruptcy estate claimed that Mirana and others were given preferential treatment by the FTX team during the early stages of the collapse, which was documented in a database.
This lawsuit against Bybit is just one of many legal disputes that the FTX estate and the legal counsel for the former exchange have had to navigate throughout the lengthy bankruptcy proceedings. Following the approval of the FTX reorganization plan on October 7, 2024, by Judge John Dorsey, FTX investors voluntarily dropped their lawsuit against Sullivan & Cromwell, the legal firm that previously represented FTX in various deals while the company was still operational. A group of FTX creditors had accused the law firm of being aware of and complicit in the FTX fraud, while still benefiting financially from their role as legal counsel for the company.