Bankrupt FTX Inks Over $227,000,000 Settlement With Bybit To Recover Stakeholder Funds
The bankrupt crypto exchange FTX has reached a settlement with the digital asset exchange Bybit to the tune of hundreds of millions of dollars.
Last week, FTX’s legal team submitted a motion approving a settlement agreement with Bybit stemming from FTX’s claims that Bybit had refused to allow the bankrupt firm to withdraw assets currently valued at approximately $175 million.
FTX’s claims indicate Bybit, typically the second-largest crypto exchange by trading volume, held the assets across six accounts.
The settlement agreement will allow FTX to withdraw the $175 million worth of assets in those accounts, and it will also stipulate that Mirana Corp., Bybit’s investment arm, buys more than $52.7 million worth of BIT tokens from FTX. FTX alleges that Mirana took steps to devalue certain BIT tokens held by the exchange.
In total, the settlement will allow FTX to recover about $227.7 million in assets.
FTX imploded and filed for bankruptcy in November 2022 amid accusations that chief executive Sam Bankman-Fried mishandled the exchange’s funds by loaning out billions of dollars worth of customer deposits to Alameda Research, the firm’s trading arm.
The exchange’s multi-billion dollar collapse led to a sharp downtick in crypto prices, and US federal authorities arrested Bankman-Fried the following month.
Earlier this month, a US bankruptcy court greenlit FTX’s plan to distribute between $14.7 billion and $16.5 billion worth of payouts to the crypto exchange’s former customers.
The plan calls for 98% of the exchange’s creditors to receive approximately 119% of the value of their holdings on the day FTX filed for bankruptcy in November 2022.
The increased payouts are thanks to higher crypto prices and FTX’s 8% stake in the AI (artificial intelligence) safety and research company Anthropic.
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Author: Conor Devitt
