FTX Takes Legal Action Against Bybit to Retrieve Assets Worth Nearly a Billion Dollars

FTX bankruptcy consultants are taking to court crypto exchange Bybit Fintech and two of its affiliated companies, attempting to retrieve monetary and digital assets with a total value of $953 million. The lawsuit filed in a Delaware court alleges Mirana, the investment division of Bybit Fintech and its affiliated crypto trading company Time Research, benefited from a preferred treatment not offered to regular FTX customers.

The lawsuit claims that the defendants pressured employers of FTX to expedite their withdrawal requests. At the same time, regular customers had to experience prolonged delays ahead of the FTX downfall at the end of 2022. Bankruptcy advisors state that Miranda withdrew over $327 million from FTX between 7 and 8 November 2022. A time frame during which withdrawals were stopped. The bankruptcy estate also alleges that Bybit has refused to return $125 million held in Bybit accounts.

The value of the assets in question in the lawsuits according to the plaintiffs, was determined by using November 1 pricing, but this is open to change if additional pricing information becomes available during the litigation.

The legal process has a solid base, considering that bankruptcies filed under Chapter 11 enable insolvent enterprises to reclaim assets paid out months ahead of a bankruptcy submission, a provision put in place to stop specific creditors from attaining an unfair upper hand by withdrawing their funds from a failing company, while other clients are not extended the same privilege.