FTX and Bybit Reaches $228 Million Settlement in Bankruptcy Lawsuit

The FTX bankruptcy estate has reached an agreement to drop its lawsuit against Bybit Fintech Ltd for a settlement amount of $228 million. Notably, this deal will allow FTX to withdraw assets from the Bybit exchange.

After months of negotiation, FTX, on Thursday, urged the US Bankruptcy Court for the District of Delaware to approve the settlement with Bybit and other related defendants. This marks a major milestone in the FTX continuous bankruptcy process.

FTX to Recover $228 Million in Digital Asset

According to the court filing on October 24, the FTX estate will reclaim $175 million worth of digital assets from Bybit as part of the settlement agreement, along with BitDAO (BIT) tokens worth $53 million.

Recall that FTX initially planned to recover about $1 billion in digital assets from Bybit and its investment arm Mirana in a lawsuit filed in November 2023.

💥 Breaking News: FTX has reached a monumental agreement to drop its litigation against Bybit in a deal valued at $228M! This paves the way for FTX to reclaim vital assets from Bybit's exchange. What does this mean for the future of crypto? #FTX #Bybit #CryptoNews… pic.twitter.com/OJUj1yAhx2

— PUPUWEB Blog (@cheinyeanlim) October 28, 2024

In the lawsuit, FTX accused Mirana of using “special privileges” to withdraw about $327 million in digital assets from the exchange before its infamous collapse in November 2022. Additionally, the lawsuit targets Mirana executives believed to have benefited from the transactions.

The lawsuit argued that Mirana was given VIP access to withdraw funds due to their close relationships with FTX executives at the time. An internal database transaction showed how Mirana was able to withdraw the said funds even after FTX had paused withdrawals for other users.

Meanwhile, a hearing has been scheduled for November 20, 2024, to conclude the settlement. If the decision is approved, the bankrupt exchange, FTX will be able to recover $175 million in digital assets and about $53 million from BIT token sales.

Commenting on the development, FTX representatives said in a statement that;

“Through the Settlement Agreement, the Debtors will be recovering substantially everything that they seek to recover,”…”The Settlement Agreement also allows the Debtors to secure this significant recovery for their stakeholders while avoiding the expense, uncertainty, and burden of continued litigation and any potential risks associated with enforcing any judgment abroad.”

FTX to Repay up to 98% of its Creditors

Meanwhile, Coinfomania previously reported that FTX had announced a repayment plan for up to 98% of its users affected by the collapse. According to the plan, users who had $50,000 or less in their FTX account would receive up to 118% of the total value of their holding as of November 2022 right before the crash.

FTX noted that users who are eligible for this refund will receive their funds within 60 days after the start date. Even though no date was given, FTX disclosed that it has about $16.5 billion in funds available to repay its customers.