FTX Trading Ltd. has reached a $228 million settlement with Bybit Fintech Ltd. to end the legal battle between both entities. This move will allow FTX to recover assets from Bybit’s exchange. As part of the deal, the defunct exchange will get back $175 million in digital assets plus sell $53 million in BIT tokens to Bybit’s investment arm, Mirana Corp.
The settlement comes as FTX recently received court approval for its bankruptcy plan which allowed it to repay customers using up to $16.5 billion in assets recovered after its historic collapse. The bankruptcy judge John Dorsey stated that FTX’s success made it a model case for a very complex bankruptcy proceeding.
FTX lands $327M win over Bybit
According to reports, FTX moved ahead to ask the US Bankruptcy Court for the District of Delaware to accept a settlement it reached with Bybi and others. However, the deal will allow the collapsed crypto exchange to recover a useful amount of funds.
FTX’s suit claimed that Mirana withdrew $327 million just before the exchange’s collapse while other users were locked out. The settlement suggests that Mirana can claim up to 75% of its account balances pre-bankruptcy. It can generate good net savings for the debtors’ estates.
It added that SBF’s exchange had stated the deal would allow it to “recover substantially everything they sought,” securing funds for stakeholders and skipping the costs and uncertainties of international litigation.
Its CEO John J. Ray III is pushing forward with the wind-down plan. It has court approval to distribute at least $12.6 billion to customers who have been waiting for their trapped assets.
FTX moves to pay out $16.5B
FTX has received court approval for its bankruptcy plan, allowing it to repay customers. The platform is now set to repay 98% of its users with accounts under $50,000 within 60 days once the plan is active.
The plan, built on settlements with customers, creditors, US agencies, and foreign liquidators, prioritizes repaying customers before other competing claims.
Meanwhile, the exchange is still negotiating with the DOJ over $1 billion seized during the Bankman-Fried prosecution. This could yield up to $230 million for FTX shareholders.
With an estimated $14.7 billion to $16.5 billion available for repayment, the exchange expects to cover at least 118% of customer account values as of its November 2022 bankruptcy filing. FTX, once a top crypto exchange, collapsed when it was revealed that Sam Bankman-Fried used customer funds to cover Alameda Research’s risky bets.
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