FTX Lawsuit Against Bybit to Recover $953 Million
The bankruptcy estate of failed crypto exchange FTX has filed a lawsuit against Bybit, its investment arm, Mirana, and several executives to recover $953 million Bybit withdrew from FTX just before its collapse. According to reports by Bloomberg, the lawsuit aims to recoup cash and assets valued at around $953 million that was withdrawn from FTX before it filed for Chapter 11 bankruptcy.
Massive Transfers Received by Bybit Before FTX Halted Withdrawals
The legal complaint filed in Delaware is aimed at Bybit Fintech Ltd., its investment arm, Mirana, and several executives. The suit claims that Mirana received gross transfers from FTX.com of digital assets currently valued at approximately $838 million. About $500 million of the funds mentioned above were transferred in the days before FTX halted its customer withdrawals on November 8, 2022. An additional $115 million in digital and fiat assets were transferred to entities and individuals associated with Bybit and its investment arm, Mirana.
βAs with Mirana, the majority of these assets β more than $61 million β were withdrawn in the final days before FTX.com and FTX US disabled withdrawals.β
FTX alleges that Bybit received βVIPβ status on its platform and that Mirana and its associates “raced to withdraw assets” from their account before the Chapter 11 filing. The claim further states that Bybit imposed limitations on the FTX estate preventing it from withdrawing assets exceeding $125 million on the exchange.
Sam Bankman-Fried Found Guilty on All Charges
FTXβs former CEO, Sam Bankman-Fried (SBF), was recently found guilty on all charges, including wire fraud, securities fraud, and conspiracy to commit wire fraud. During the criminal trial against SBF, several witnesses implicated him in the collapse of FTX. SBF will receive his sentence on March 28, 2024, and is expected to receive imprisonment between 5 and 20 years.
Hot Take: Implications of the Lawsuit for Crypto Investors
The lawsuit filed by FTXβs bankruptcy estate against Bybit and its affiliates raises concerns about fraudulent transfers within the crypto space. The legal battle highlights potential risks faced by investors due to regulatory issues and unethical practices within cryptocurrency exchanges. This case emphasizes the importance of due diligence and cautious decision-making when engaging with crypto platforms to protect your investments.
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