FTX Bankruptcy Estate Reaches $228M Settlement with Bybit and Mirana Amid Ongoing Asset Recovery Efforts

FTX Bankruptcy Estate Reaches $228M Settlement with Bybit and Mirana Amid Ongoing Asset Recovery Efforts

The FTX bankruptcy estate has reached a $228 million settlement agreement with the cryptocurrency exchange Bybit and its investment division, Mirana, as part of ongoing efforts to recover funds for FTX’s creditors.

Per a court filing on October 24, the FTX estate will settle its legal claims against Bybit, securing $175 million in digital assets and an additional $53 million in BIT tokens as part of the agreement. The lawsuit, initially filed in Delaware in November 2023, aimed to recover approximately $1 billion from Bybit and Mirana.

FTX had accused the companies of exploiting a “VIP” status to withdraw around $327 million shortly before FTX’s collapse in November 2022. Advisors for FTX alleged that Mirana pressured FTX staff to prioritize their withdrawal requests, bypassing the delays imposed on regular users.

The lawsuit also named various individuals, including Singapore-based associates and a Mirana executive, as beneficiaries of these transactions. FTX’s attorneys argued that Mirana’s close connections with FTX executives led to prioritized withdrawal access, allowing them to move funds even after FTX paused withdrawals for the majority of users on November 8, 2022. These transactions were reportedly logged in FTX’s internal database, illustrating how Mirana accessed funds amid the halt.

The settlement hearing is slated for November 20, 2024. If approved, FTX will retrieve $175 million in digital assets stored on Bybit’s platform and will be able to sell nearly $53 million in BIT tokens to Mirana. FTX’s legal team noted that, while their claims were valid, further litigation would be “time-consuming and costly,” making this settlement an efficient way to recover assets without prolonged delays.

This resolution arrives shortly after the approval of FTX’s bankruptcy plan on October 7, 2024, under which debtors are expected to repay users approximately 118% of their claims in cash.

Separately, key FTX executives have negotiated plea agreements with federal prosecutors over the past months. On September 24, one executive received a reduced sentence of two years from District Judge Lewis A. Kaplan due to her cooperation in the investigation, which proved instrumental in revealing details of FTX’s downfall. FTX Digital Markets CEO Ryan Salame was sentenced to 7.5 years in prison in May, while former head of engineering Nishad Singh has petitioned the court to waive his sentence.