FTX Settles Lawsuit with Bybit in $228 Million Deal to Repay Creditors

FTX’s Legal Battle with Bybit Comes to an End

In a major development, FTX has agreed to settle its lawsuit against Bybit, Bybit’s executives, and its investment arm, Mirana, with an agreement that will secure FTX around $228 million. This settlement provides a crucial boost to FTX’s ongoing efforts to repay creditors following its 2022 collapse.

The settlement, filed last Thursday in a U.S. bankruptcy court, was described as the outcome of “lengthy, good faith negotiations.”

The Breakdown of the Settlement

Under the terms of the agreement, FTX will recover $175 million in crypto assets held in Bybit accounts. Additionally, it will sell over 105 million BIT tokens from Mirana, valued at approximately $52.7 million, to generate liquidity.

Interestingly, Bybit executives who moved funds from FTX prior to the bankruptcy will still be able to claim 75% of the balance as of the bankruptcy petition date. This compromise allows both parties to conclude the matter without prolonged litigation.

Legal History of the Dispute

The dispute began last November when FTX accused Bybit of exploiting “VIP” access to withdraw assets just before FTX’s collapse. The lawsuit alleged that Bybit’s actions effectively blocked FTX from reclaiming assets, holding them “hostage” on Bybit’s platform. The case has been one of several high-profile legal proceedings as FTX navigates its complex bankruptcy.

FTX’s Road to Repayment

This settlement follows FTX’s recent reorganization plan, which received overwhelming support from 94% of its creditors and approval from the District of Delaware Bankruptcy Court. The plan, designed to repay 98% of creditors at a minimum of 118% of their claim value, provides a comprehensive roadmap for FTX’s restructuring.

Conclusion

The $228 million settlement with Bybit marks a significant step for FTX’s creditors, offering new hope for repayment after the exchange's dramatic downfall. As FTX’s reorganization plan moves forward, this recovered sum will be instrumental in helping creditors reclaim lost assets, signaling the exchange’s progress in addressing one of the largest crypto collapses to date.