One year on from its bankruptcy, the CEX (Centralized Exchange) with the sulphurous reputation FTX is launching a new initiative in the hope of improving its cash flow.
As part of a strategy orchestrated by new management to recover funds dispersed prior to its bankruptcy filing, the troubled crypto exchange platform has taken a significant step by filing a lawsuit against Bybit Fintech and its associated entities. The aim of this legal action is to recover nearly $953 million in assets allegedly withdrawn from FTX just prior to its bankruptcy filing in early November 2022.
FTX Bybit lawsuit: exchange wages war against Bybit Fintech
This Friday, November 10, FTX’s bankruptcy advisors initiated legal proceedings against Bybit Fintech Ltd, Mirana Corp.and Time Research Ltd a well-known crypto trading entity. This legal action, filed before a Delaware court, with the aim of recovering funds withdrawn prior to FTX’s declaration of bankruptcy. In the course of these proceedings, allegations have been made concerning the granting of special privileges to Mirana Corp an investment subsidiary of Bybit.
According to the complaint, Mirana Corp. would have used “VIP” privileges that most FTX customers did not have to withdraw a significant portion of FTX’s assets before its collapse. These actions took place while regular FTX.com customers were experiencing substantial delays in their withdrawal requests. Mirana would have put pressure on FTX staff to accelerate its own withdrawals.
As part of the lawsuit, FTX said it valued the assets removed from its platform by Bybit and its affiliates using November 1st prices.
Complaints seeks to recover assets valued at approximately $953 million including more than $327 million that Mirana would have withdrawn from FTX between November 7 and November 8, 2022, when the exchange suspended withdrawals.
In sum, FTX’s legal action against Bybit Fintech reveals its ongoing efforts to remedy its bankruptcy problems and secure the repayment of creditors that is scheduled for next year.
Knowing that many FTX victims wish to recover their funds, we can imagine that the recovery initiative launched by the exchange will have many supporters. In short, a new FTX Bybit lawsuit case to follow.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.