FTX has decided to resolve its case against the cryptocurrency exchange Bybit, its management, and Bybit’s investment arm, Mirana, allowing the FTX estate to recover around $228 million.
This settlement, revealed in an October 24 legal filing, marks a key recovery step for FTX, which plans to repay creditors in the coming months.
“Over the past months, the parties have engaged in lengthy, good faith negotiations regarding these claims, and ultimately reached a global settlement reflected in the Settlement Agreement,” said FTX’s bankruptcy court petition submitted last Thursday.
The agreement allows FTX to recoup $175 million in digital assets stored in Bybit accounts and an extra $52.7 million from the sale of approximately 105 million BIT tokens via Mirana. The defendants, who had already withdrawn funds from FTX before its 2022 collapse, can reclaim 75% of their entire account balances as of the bankruptcy filing date.
FTX initially filed a $1 billion lawsuit against Bybit and Mirana in November 2023, alleging they used “VIP” access and ties with FTX executives to withdraw around $327 million in assets just before FTX’s collapse.
FTX, led by bankruptcy expert John J. Ray III, announced that over 94% of its creditors supported its reorganization plan, which was approved by the Delaware Bankruptcy Court to repay 98% of creditors at least 118% of their claim value in cash.
The action against Bybit is one of several legal challenges the FTX estate has faced throughout its lengthy bankruptcy proceedings. These conflicts have complicated the company’s efforts to reclaim assets and repay creditors.
After Judge John Dorsey approved FTX’s reorganization plan on October 7, investors abandoned their action against Sullivan & Cromwell, the company’s previous legal firm. Some creditors claimed the firm was aware of and benefited from FTX’s alleged wrongdoing while still acting as its counsel.
