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Bankrupt crypto exchange FTX has settled a lawsuit against Bybit for $228 million, initiated in 2023 to recoup funds for creditors and customers. The settlement permits FTX to retrieve $175 million in digital assets from Bybit and sell $53 million BIT tokens to Bybit’s investment arm, Mirana Corp. The lawsuit accused Bybit and Mirana of illicitly withdrawing approximately $327 million just prior to FTX’s collapse. Final settlement is pending court approval, with a hearing scheduled for November 20, 2024.

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So, FTX, which is going through bankruptcy, has settled a legal dispute with the Bybit exchange for a handsome $228 million. This is from a lawsuit FTX started in 2023, hoping to recover some funds to pay back its customers and creditors.

According to the settlement, FTX will be able to get back $175 million in digital funds held on Bybit and also sell around $53 million in BIT tokens to Mirana Corp. Mirana is an investment wing of the Bybit exchange. Lawyers for FTX believed that, while they had a good case, continued legal battles could get tricky and costly:

“Plaintiffs’ claims for turnover, violations of the automatic stay, and fraudulent and preferential transfers are disputed, carry some degree of risk, and in any event would be time-consuming and expensive to further litigate.”

Before the settlement is done and dusted, it still needs a nod from a court. A hearing to discuss the agreement between FTX and Bybit is set for November 20, 2024, at 2 PM Eastern Time.

FTX first sued Bybit and Mirana in November 2023, demanding $1 billion. They alleged that Bybit and Mirana, leveraging their “VIP” access and close ties with FTX leaders, managed to withdraw about $327 million in digital funds and cash just before FTX’s fall.

FTX’s lawyers argue that Mirana and others were given special withdrawal rights by the FTX team during the initial stages of the crisis.

This lawsuit against Bybit is just one of many that FTX had to handle during the extended bankruptcy process. When the FTX reorganization plan was approved by Judge John Dorsey on Oct. 7, 2024, FTX investors voluntarily withdrew their lawsuit against Sullivan & Cromwell. This firm had represented FTX in numerous deals while the company was still up and running.

Some FTX creditors claimed that this law firm knew about and were part of the FTX scam while pocketing money from continuing to act as the company’s legal advisors.

Source: Cointelegraph