Türkçe
Español
Bankrupt advisors at the cryptocurrency exchange FTX have filed a lawsuit against Bybit, another crypto exchange, to recover $953 million worth of crypto and cash. According to allegations, Bybit withdrew all funds right before FTX filed for bankruptcy in November last year. The advisors argue that this transfer of assets was illegal and are demanding the return of the funds.
Details of FTX’s Lawsuit Against ByBit
In the lawsuit filed on November 10th in Delaware court, it is claimed that Bybit’s investment arm, Miran, took advantage of exclusive “VIP” benefits that most FTX customers did not have access to. Miran is accused of using these privileges to withdraw the majority of their assets from FTX before its collapse in November 2022.
The complaint alleges that Miran pressured FTX employees to expedite their withdrawal requests, while regular FTX customers faced delays. The legal action aims to recover a total of approximately $953 million, including funds over $327 million that were allegedly withdrawn by Miran during the period when FTX suspended withdrawals on November 8th, 2022.
The bankruptcy case involves Bybit, Miran, and a related cryptocurrency trading firm called Time Research. The legal action also includes a senior Miran executive from that period and Singaporean residents who allegedly benefited from or played a role in FTX’s withdrawal operations, according to the complaint.
Recovering FTX’s Funds
Chapter 11 typically refers to the authority that allows financially distressed companies to recover funds used in the months leading up to bankruptcy. This authority prevents certain creditors from gaining an unfair advantage by successfully withdrawing their funds from a failing business, while others cannot. The lawsuit against Bybit is the latest effort by FTX’s new management to recover funds paid prior to the company’s Chapter 11 filing in November 2022.
In the lawsuit, FTX claims to have evaluated the assets withdrawn from the cryptocurrency exchange by Bybit and its affiliates based on the pricing on November 1st, 2022. FTX also added that it may refine the pricing information as the legal proceedings progress. The complaint also noted that certain legal claims may be subject to subsequent defenses regarding potential new valuations.
Currently, the cryptocurrency exchange FTX is working to relaunch the exchange with the support of the former president of NYSE showing significant interest. Recovering the funds withdrawn by Bybit will strengthen FTX’s reopening efforts. Additionally, the cryptocurrency exchange is also selling its Solana (SOL) holdings to generate more cash.
