FTX Advisers Sue Bybit for $953 Million

Advisers for the bankrupt cryptocurrency exchange FTX have initiated a legal action against the crypto exchange Bybit, seeking to recover digital and monetary assets valued at $953 million.

According to Bloomberg, these advisers allege that Bybit withdrew these assets just before FTX declared Chapter 11 bankruptcy in November 2022. The lawsuit, filed in a Delaware court on November 10, names Bybit Fintech and its investment arm, Mirana, along with a related crypto trading company, Time Research. It also implicates a senior executive at Mirana and several individuals from Singapore, accusing them of benefiting from or participating in withdrawals now included in the FTX bankruptcy case.

The advisers claim that Mirana leveraged its “VIP” status to expedite the withdrawal of most of its assets from FTX prior to the exchange’s collapse last year. They contend that Mirana pressured FTX staff to fast-track its withdrawal requests, while ordinary users faced lengthy delays. The advisers assert that even after FTX halted withdrawals on November 8, 2022, Mirana still managed to remove over $327 million from their FTX account, funds that FTX now aims to retrieve through the lawsuit.

Under Chapter 11, insolvent companies can recoup payments made before a bankruptcy filing, a provision meant to prevent select creditors from unfairly withdrawing funds from a failing business while others cannot.

Bybit, led by CEO Ben Zhou, has also recently announced plans to halt its services in the U.K., just ahead of the compliance deadline for the country’s advertising and promotion regulations for crypto firms.

Meanwhile, FTX is exploring options to revive its operations, with Tom Farley, the former president of the New York Stock Exchange, showing significant interest in acquiring the exchange.

Farley’s company, along with two other candidates, Figure Technologies and the crypto-focused Proof Group, are in the final stages of bidding to take over and possibly rejuvenate FTX.

Additionally, FTX is selling its holdings of Solana (SOL) tokens to raise funds. SOL is currently trading at $61.94, marking a nearly 50% increase over the past week, according to CoinGecko data.

Furthermore, FTX’s native token, FTT, has seen a remarkable increase, rising by over 30.24% in the last 24 hours and experiencing a 95% boost in trading volume during the same time frame.

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