FTX’s bankruptcy managers have initiated legal action against Bybit crypto exchange, along with two other entities, in an effort to recover $953 million in assets withdrawn before the collapse of FTX. This legal move follows recent attempts by the bankruptcy managers to reclaim funds from various parties connected to the defunct exchange.
The lawsuit, filed on November 10, targets Bybit and its investment arm, Mirana Corp. It alleges that Mirana Corp. had special privileges that allowed the withdrawal of assets from FTX and claims that the company pressured FTX employees to facilitate these withdrawals. The timing of Mirana’s asset withdrawals reportedly coincided with a surge in withdrawals leading up to FTX’s collapse.
The filing states that Bybit used its control over FTX Group assets as leverage to compel FTX.com to prioritize Mirana’s withdrawals. After FTX.com halted customer withdrawals, Bybit allegedly seized FTX Group assets held on its exchange, refusing to release them unless Mirana completed the withdrawal of its entire FTX.com account balance.
The lawsuit’s primary objective is to recover the approximately $953 million in assets that Mirana withdrew from FTX, including over $327 million reportedly withdrawn between November 7 and 8 of the previous year.
Additionally, the lawsuit implicates another crypto trading firm, Time Research Ltd, and a Mirana executive, suggesting that some Singaporean residents may have also benefited from these withdrawals.
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FTX has been actively pursuing the recovery of funds since the start of its bankruptcy processes and has, to date, recovered $7 billion worth of assets from various efforts. The firm has filed lawsuits against former executives and other entities to ensure an equitable distribution of assets among all victims of its failure.
As part of its asset recovery efforts, FTX has transferred over $300 million worth of crypto assets, including Solana and Ethereum, to exchanges as of November 8. The legal proceedings against Bybit and others underscore the complexities and challenges involved in the aftermath of FTX’s collapse.
