FTX agrees to drop lawsuit against Bybit in $228 million settlement

FTX has agreed to drop its lawsuit against Bybit, its executives and investment arm Mirana in a settlement that would allow the defunct cryptocurrency exchange to collect around $228 million. The amount is expected to help FTX repay its creditors in the coming months.

“Over the past months, the parties have engaged in lengthy, good faith negotiations regarding these claims, and ultimately reached a global settlement reflected in the Settlement Agreement,” said FTX’s bankruptcy court filing submitted last Thursday.

The settlement will allow FTX’s liquidation estate to reclaim $175 million in cryptocurrencies held on Bybit accounts. FTX will sell Mirana (Bybit's investment arm) over 105 million BIT tokens valued at around $52.7 million.

Additionally, the defendants who moved out their funds from FTX before its bankruptcy will still be allowed to claim back 75% of the aggregate balance in their accounts as of the petition date.

“Through the Settlement Agreement, the Debtors will be recovering substantially everything that they seek to recover,” FTX said in the filing.

The FTX bankruptcy estate sued Bybit last November, alleging that it used its “VIP” access to FTX to withdraw hundreds of millions in cash and digital assets on the eve of FTX collapse in 2022. FTX also claimed Bybit restricted the estate from withdrawing over assets held on Bybit’s trading platform, holding the assets “hostage.”

FTX, led by bankruptcy expert John J. Ray III, announced earlier this month that over 94% of its creditors have voted in favor of the company’s reorganization plan. A week after, the District of Delaware Bankruptcy Court approved the plan , which set out to repay 98% of creditors at least 118% of their claim value in cash.