As a seasoned researcher who has witnessed the rollercoaster ride of the crypto world, I find this settlement between FTX and Bybit to be a significant step towards resolution for all parties involved. The legal proceedings have been lengthy and complex, reflecting the intricate nature of digital assets and their governance.
In a court document submitted on October 24th, the administrators of the FTX bankruptcy case consented to a $228 million settlement with Bybit exchange. This agreement came about as part of a lawsuit initiated by FTX in 2023, aimed at retrieving funds to compensate their former clients and creditors.
As stated in the court documents, the settlement arrangement enables FTX to retrieve around $175 million worth of digital assets stored on Bybit and subsequently sell about $53 million in BIT tokens to Mirana Corp, a subsidiary of the Bybit trading platform. Lawyers representing FTX emphasized that while their case is solid, pursuing additional legal action could be complex and time-consuming due to its merits.
“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.”
The court has yet to give its final approval on the agreement, which is set for a validation hearing on November 20, 2024, at 2 PM Eastern Standard Time, between the two involved parties.
The FTX bankruptcy estate sues Bybit
In November 2023, FTX first initiated a lawsuit for one billion dollars against Bybit and Mirana. The accusation was that these entities exploited their “VIP” status and intimate ties with FTX leaders to swiftly withdraw around $327 million in digital assets and cash, just prior to the ultimate downfall of FTX.
Lawyers representing the FTX bankruptcy case asserted that Mirana and others received preferential access to make withdrawals from FTX during its early stages of downfall, a privilege recorded in a database.
FTX bankruptcy estate finally out of the woods?
During the prolonged bankruptcy process, the FTX estate and its legal team encountered numerous lawsuits, including one filed against Bybit, as they navigated through various complex legal disputes.
After Judge John Dorsey approved the FTX reorganization plan on October 7, 2024, FTX investors decided to withdraw their lawsuit against Sullivan & Cromwell, the law firm that had previously worked with FTX during its active operations and represented it in various deals.
Some creditors of FTX have accused a law firm of knowing about and actively participating in FTX’s fraudulent activities, all while they continued to receive financial advantages by representing the company legally.
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2024-10-27 20:20