FTX Scandal News: Legal Battle With Bybit End In $228M Settlement

FTX Scandal Update: Bybit Settlement Boosts Creditor Repayment Plan

FTX has reached a substantial settlement with Bybit, its executives, and Mirana, Bybit’s investment arm, putting an end to the ongoing lawsuit between the two. 

The FTX Bybit agreement details reveal that this settlement enables FTX bankruptcy estate to recover approximately $228 million, a major step toward repaying creditors. 

After months of negotiations, both parties finalized the agreement, with FTX filing the terms in bankruptcy court last Thursday.

Recovery Plan: $175 Million in Crypto and 105 Million BIT Tokens

Under the settlement, FTX’s liquidation estate will recover $175 million in cryptocurrency from accounts held on the Bybit platform. Additionally, FTX will sell over 105 million BIT tokens from Mirana, worth an estimated $52.7 million. This recovery plan significantly strengthens FTX’s financial position as it continues its bankruptcy reorganization efforts.

Partial Fund Reclaim for Bybit Users

One key aspect of the settlement allows Bybit users who withdrew funds before FTX’s 2022 collapse to reclaim 75% of their account balances as of the bankruptcy filing date. This provision offers some relief to affected customers, helping to soften the impact of the platform’s bankruptcy on individual users. According to FTX’s filing, the settlement nearly fulfills its original claims, reinforcing FTX's ability to proceed with debt repayments.

Background of the Lawsuit: FTX’s Allegations Against Bybit

FTX filed the lawsuit in November 2022, accusing Bybit of misusing its “VIP” access to FTX by withdrawing substantial funds and digital assets in anticipation of FTX’s impending collapse. The FTX scandal includes claims that Bybit’s actions restricted FTX’s estate from withdrawing assets on the Bybit platform, further complicating FTX’s liquidity crisis.

FTX’s Reorganization and Future Steps

Led by CEO and bankruptcy expert John J. Ray III, FTX has focused on restructuring its financial obligations to maximize creditor payouts. Recently, the company announced that 94% of creditors voted in favor of its reorganization plan, which has since received approval from the Delaware Bankruptcy Court. This plan is set to repay 98% of creditors at least 118% of their claim values in cash, signifying substantial progress in FTX’s wind-down process.

Conclusion

The Bybit FTX settlement provides immediate capital and marks a major milestone in FTX’s bankruptcy recovery plan. 

For those interested in how to withdraw USDT from Bybit to a bank account or exploring Bybit careers, the evolving landscape of cryptocurrency exchanges remains pivotal amid ongoing developments. Keep an eye on the FTX hearing and the implications of the FTX Bybit $228M case for further updates in the industry.