FTX Bankruptcy Lawsuit Seeks Recovery of $935 Million Transferred to Bybit’s Mirana Corp
A recent lawsuit filed by the entities overseeing FTX’s bankruptcy process aims to recover $935 million that was transferred to Bybit’s investment arm and others just before the former filed for Chapter 11 in November 2022. Bybit is also accused of using FTX assets held on its platform as leverage in an attempt to force the transfer of approximately $20 million.
Mirana Corp Accused of Fraudulent Transfers
The lawsuit accuses Mirana Corp, an investment arm of Bybit, of using its “VIP” status to receive the larger chunk of the $935 million transferred before FTX’s Chapter 11 filing. The transfers are alleged to have been made with the intent to hinder, delay, or defraud FTX.com’s present or future creditors, according to the lawsuit. The entities managing FTX’s bankruptcy process are seeking the return of the full amount of such transfers plus interest for the benefit of the debtors’ bankruptcy estates.
Bybit Accused of Holding FTX Assets Hostage
In addition to the fraudulent preferential treatment charges against Bybit’s investment arm, the lawsuit accuses Bybit of refusing to honor transfer requests made on behalf of FTX debtors. Bybit is said to have demanded the release of approximately $20 million which Mirana Corp could not extract before FTX disabled withdrawals on Nov. 8, 2022. This has led to accusations that Bybit is continuing “to hold these assets hostage” with hopes of circumventing the bankruptcy process.
Hot Take: Will FTX Bankruptcy Managers Succeed in Recovering Assets?
The legal battle between FTX and Bybit continues as FTX’s bankruptcy managers seek judicial enforcement of their rights under the Bankruptcy Code to ensure that funds held at Bybit are transferred to the debtors’ estate. As this case unfolds, it raises questions about whether FTX will succeed in recovering assets and how it will impact both platforms and their users.
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