Bybit and FTX have reached a settlement of $228 million. The agreement encompasses the recovery of $175 million in cryptocurrency.
Bybit and FTX have reached a settlement agreement approximately $228 million in value. This has concluded the protracted legal dispute regarding purported preferential withdrawals that occurred prior to the collapse of FTX.
The US Bankruptcy Court for the District of Delaware received the settlement on Thursday. This decision is also a recent development in FTX’s endeavors to reclaim assets for customers who have been impacted.
There are two primary components to the agreement. The first is the restitution of $175 million in cryptocurrency that is presently holding on Bybit’s exchange.
The second transaction involves the transfer of BIT tokens to Mirana, Bybit’s investment subsidiary, for roughly $53 million. This settlement has now resolved the protracted dispute.
Nevertheless, the amount still falls short of the $953 million that the bankruptcy estate of FTX sought in their November 2023 lawsuit.
As per the settlement agreement, defendants who withdrew funds shortly prior to the bankruptcy will receive creditor claims that are equivalent to 75% of their account balances as of the date of FTX’s bankruptcy filing.
In the filing, FTX underscored that this arrangement results in “substantial net savings for the debtors’ estates.” The exchange also mentioned that this prevents the uncertainties and expenses that are associated with extended litigation. In the filing, FTX stated,
“The Debtors will be able to recover practically everything they are pursuing through the Settlement Agreement.”
FTX’s allegations that Bybit’s investment subsidiary, Mirana, received preferential treatment during the exchange’s final days sparked the dispute.
The exchange filed the initial lawsuit on November 10, 2023, with the objective of recovering approximately $953 million in cash and cryptocurrency. FTX asserted that Mirana’s VIP status enabled it to withdraw nearly $500 million shortly before it suspended withdrawals.
In particular, FTX claimed that Mirana utilized special privileges to withdraw approximately $327 million in cryptocurrency from the platform, while other account holders encountered difficulties in accessing their funds..
The claims against Bybit were fundamentally based on this preferential treatment. Additionally, FTX contended that these actions diminished the amount of funds accessible to other consumers.
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