FTX Pursues Bybit for Over $950 Million
About a year after its collapse, FTX, a once-prominent crypto exchange, is taking legal action to recover funds from third parties. This time, the company’s legal team has set its sights on Bybit, a former competitor, seeking the return of cryptocurrencies and cash valued at more than $950 million.
Bloomberg reported that FTX has filed a lawsuit against Bybit Fintech Ltd and two corporate affiliates for $953 million in cash and crypto. The funds were allegedly withdrawn from FTX shortly before it filed for bankruptcy protection in mid-November 2022.
The lawsuit alleges that Bybit’s investment arm, Mirana Corp., had special privileges on FTX that allowed them to withdraw assets before the exchange’s collapse. Bybit allegedly pressured FTX staff to expedite these withdrawals, with about $327 million withdrawn between November 7 and 8 when the service was paused.
FTX valued the total assets at $953 million using prices from November 1. Bybit has not yet responded to the lawsuit.
Bybit’s Response and Impact
Bybit, which touts itself as “the most reliable cryptocurrency exchange,” has not officially responded to the lawsuit. After FTX’s collapse, Bybit also had to reduce its employee count by 30%. However, it saw an increase in trading volumes in the months following FTX’s downfall.
FTX’s Legal Efforts
FTX’s new leadership and legal team have been actively pursuing various avenues to recover lost funds. This includes legal action against former ambassadors like Naomi Osaka and Shaquille O’Neal, as well as seeking the return of previous gifts from Stanford University.
Hot Take: The Legal Battle Continues
The ongoing legal battle between FTX and Bybit highlights the complexities and challenges involved in recovering funds from third parties in the aftermath of a major exchange collapse. As both companies navigate this dispute, it underscores the importance of transparency and accountability within the crypto industry.
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