In a major legal development, bankruptcy advisers for FTX have filed a lawsuit against Bybit Fintech and two of its associated entities.
What Happened: The suit was lodged against Bybit Fintech Ltd., Mirana Corp., and a connected crypto trading entity named Time Research Ltd.
The litigation, instituted in a Delaware court, is focused on retrieving approximately $953 million in assets and digital funds that were supposedly withdrawn from FTX before its Chapter 11 bankruptcy filing a year ago.
Mirana Corp., a Bybit investment subsidiary, allegedly took advantage of special “VIP” privileges to withdraw a substantial portion of its assets from FTX before its collapse in November 2022. According to the claims, while typical FTX.com clients were enduring long wait times for their withdrawals, Mirana was pressuring FTX staff to expedite its own requests.
The lawsuit also implicates a senior executive of Mirana and certain Singaporean residents accused of benefiting from or aiding in the FTX withdrawals. This legal action is part of a broader effort by FTX’s new leadership to recoup funds that were dispersed prior to its Chapter 11 filing in November last year.
Why It Matters: This lawsuit comes in the wake of a tumultuous period for FTX. Just days before the FTX platform’s collapse, the company and its debtors had sought approval from the U.S. bankruptcy court of Delaware for the sale of some trust assets valued at roughly $744 million. These trust assets were composed of funds from Grayscale and Bitwise.
A court filing proposed the sale or transfer of these assets to prepare for anticipated distributions to creditors in U.S. currency, providing the debtors with the flexibility to quickly sell the trust assets when deemed appropriate.
This legal action against Bybit is part of a larger, ongoing effort to resolve FTX’s bankruptcy issues and ensure creditors are repaid.
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