The bankrupt crypto exchange will be able to recover some of the funds it needs to pay creditors
The FTX bankruptcy estate has reached a $228 million settlement with the Bybit cryptocurrency exchange, marking a step forward in efforts to recover assets for creditors affected by the exchange’s collapse. This agreement, filed on October 24, allows FTX to reclaim $175 million in digital assets currently held by Bybit and sell an additional $53 million worth of BIT tokens to Mirana Corp, an investment branch of Bybit. The arrangement is still pending court approval, with a final hearing set for November 20.
This settlement stems from a 2023 lawsuit initially filed by FTX, which sought to retrieve funds for its bankruptcy estate following the platform’s sudden collapse. FTX’s legal team argued that Bybit and its affiliates had preferential access, allegedly withdrawing approximately $327 million before the exchange shut down. The claims included alleged preferential and fraudulent transfers, along with alleged breaches of an automatic stay that had been imposed on FTX’s assets.
FTX’s legal team stated that while they believe the claims have substantial merit, further litigation would be costly and complex. They argue that pursuing the case through additional court proceedings would likely consume both time and resources, which could be better allocated to repay creditors.
This lawsuit is one of numerous legal entanglements for the FTX estate in the wake of its bankruptcy proceedings. Earlier in October, Judge John Dorsey approved FTX’s reorganization plan, which seeks to simplify asset distribution among creditors and streamline the settlement process.
The FTX bankruptcy saga has been complicated, with multiple stakeholders seeking reparations, including former investors and creditors. The estate’s settlement with Bybit marks a substantial recovery step, potentially hastening financial restitution for those impacted by FTX’s collapse.
