YEREVAN (CoinChapter.com) — The FTX bankruptcy estate announced a $228 million settlement with Bybit, as documented in an Oct. 24 court filing. Originally filed in 2023, this lawsuit aimed to recover funds for FTX creditors and former customers. Under the terms of the settlement, FTX will regain $175 million in digital assets held by Bybit and sell an additional $53 million in BIT tokens to Mirana Corp, Bybit’s investment division.
The agreement allows FTX to settle claims efficiently, avoiding the costs and duration of continued litigation. FTX attorneys acknowledged the risks of further legal proceedings, citing that additional litigation could be both “time-consuming and expensive.” A court hearing for final approval is scheduled for Nov. 20 at 2 PM Eastern Time.
Background: The $1 Billion Lawsuit Against Bybit and Mirana Corp
FTX originally filed a $1 billion lawsuit against Bybit and Mirana Corp in November 2023. According to the FTX bankruptcy estate, Bybit and Mirana allegedly leveraged relationships with FTX executives to secure “VIP” access, enabling them to withdraw approximately $327 million in digital assets and cash just before FTX’s collapse. Attorneys for FTX allege that this status gave Bybit and Mirana priority over other users, allowing them to safeguard assets ahead of the company’s downfall.
Screenshot of the FTX lawsuit against Bybit. Source: Kroll
The lawsuit detailed how Bybit and Mirana used this VIP status to secure funds during critical phases of FTX’s collapse, which were tracked within FTX’s internal database. The disputed access has been a primary focus of the case, as FTX’s bankruptcy team sought to reclaim funds deemed preferential or fraudulent transfers.
Upcoming Hearing to Ratify the FTX/Bybit Settlement Agreement
The settlement between FTX and Bybit requires court approval before it can take effect. The Nov. 20 hearing will play a decisive role in resolving this aspect of FTX’s bankruptcy proceedings. Upon approval, FTX could move forward with asset distribution to creditors, bringing the bankruptcy estate closer to fulfilling its repayment obligations. Legal representatives from both sides are expected to attend the hearing, where the court’s ruling will set the stage for future bankruptcy settlements.
FTX’s legal team emphasized that the settlement’s terms offer a balanced resolution, eliminating the need for prolonged litigation while securing immediate funds for distribution.
FTX’s Broader Bankruptcy Proceedings
The Bybit settlement is only one part of FTX’s extensive bankruptcy process. Earlier, on Oct. 7, Judge John Dorsey approved FTX’s reorganization plan, marking a major step toward resolving FTX’s outstanding obligations. This approval allows FTX to proceed with structured repayments to its creditors.
FTX Reorganization Plan Approved. Source: PRNewswire
Another recent development involved a lawsuit from a group of FTX creditors against Sullivan & Cromwell, the legal firm that represented FTX in several transactions before its collapse. The creditors alleged that Sullivan & Cromwell continued to provide legal services to FTX despite being aware of possible irregularities, allegedly benefiting financially from these dealings. Following the approval of FTX’s reorganization plan, the creditors voluntarily dismissed the lawsuit against the law firm.
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