FTX to Drop Lawsuit Against Bybit in a $228M Settlement

TL;DR

• Defunct crypto exchange FTX has agreed to drop its lawsuit against Bybit.

• FTX agreed to drop the lawsuit in a $228 million settlement.

FTX to Drop its Lawsuit Against Bybit

Defunct cryptocurrency exchange FTX has agreed to drop its lawsuit against Bybit, its executives, and investment arm Mirana in a settlement that would see it collect $228 million. 

The money would help FTX repay its creditors as the crypto exchanges continue to be a mess two years after declaring bankruptcy. 

In a court filing on Thursday, FTX said,

“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. Through the Settlement Agreement, the Debtors will be recovering substantially everything that they seek to recover.”

FTX’s liquidation estate can reclaim $175 million in cryptocurrencies held on Bybit accounts with this settlement. Furthermore, FTX will sell Mirana (Bybit's investment arm) over 105 million BIT tokens valued at around $52.7 million.

In addition to this, the defendants who moved out their funds from FTX before its bankruptcy can claim back 75% of the aggregate balance in their accounts as of the petition date.

This latest development comes after the FTX bankruptcy estate sued Bybit last November. In its lawsuit, FTX alleged that Bybit used its VIP access to FTX to withdraw hundreds of millions in cash and digital assets prior to FTX’s collapse in 2022. Furthermore, FTX also claimed Bybit restricted its bankruptcy estate from withdrawing over assets held on Bybit’s trading platform, holding the assets hostage.

Earlier this month, FTX announced that over 94% of its creditors approved its reorganization plan. The District of Delaware Bankruptcy Court approved the plan, which would see FTX repay 98% of creditors at least 118% of their claim value in cash.