FTX and Bybit reach a $228 million settlement agreement, pending court approval on 11/20.

The FTX restructuring team recently reached a settlement agreement with the cryptocurrency exchange Bybit, with a settlement amount of up to $228 million. This settlement stems from a claim lawsuit filed by FTX against Bybit and its affiliated investment division in 2023. Since 2022, the collapse of FTX has had a growing impact, and the settlement funds will be used to repay affected users and creditors post the FTX closure. A federal court is also expected to hold a hearing on 11/20 this year to approve the settlement agreement.

Bybit Uses "VIP" to Withdraw $327 Million in Advance

In 2023, the bankruptcy reorganization team of FTX filed a lawsuit against the Bybit exchange and its investment arm Mirana, accusing them of using their "VIP" status at FTX to withdraw approximately $327 million in assets before the collapse of FTX in November 2022. According to the U.S. Bankruptcy Code, FTX has the right to claw back funds in the months leading up to the bankruptcy filing to ensure fair treatment of all creditors.

Reaching a $228 Million Settlement, Approved by Federal Court on November 20

The documents indicate that the settlement agreement allows FTX to withdraw $175 million worth of digital assets from Bybit and sell approximately $53 million worth of BIT tokens to Mirana Corp, Bybit's investment arm. FTX's lawyers stated that the FTX bankruptcy team had a strong case in this lawsuit, but continuing litigation would consume significant time and costs, hence the decision to settle.

This settlement agreement is still subject to approval by the Federal Court and a hearing is scheduled for 2:00 PM Eastern Time on November 20th to approve the agreement. If approved, the settlement funds will be used to repay former FTX users and creditors.

Accusing Bybit of Escaping with VIP Privileges, FTX Reorganization Team Sues for $953 Million