FTX Bankruptcy advisors appointed to the crypto exchange Bybit Fintech Ltd. to recover $953 million worth of digital assets and cash. He filed a lawsuit against the company. Advisers claim that ByBit withdrew all funds just before FTX filed for Chapter 11 bankruptcy last November.
The application dated November 10, 2023, submitted to a court in Delaware, claimed that Bybit’s investment arm, Mirana Corp, benefited from special “VIP” advantages that are not offered to most FTX customers. Mirana is accused of taking advantage of these privileges to move most of her assets off FTX before the platform’s November 2022 collapse.
The complaint alleges that Mirana pressured FTX employees to expedite withdrawal requests, while regular customers experienced delays. The lawsuit aims to recover a total of approximately $953 million in assets, including over $327 million allegedly withdrawn by Mirana during the period when the exchange suspended withdrawals on November 8, 2022.
bankruptcy case Bybit Fintech Ltd., Mirana and Time Research Ltd. It describes a related crypto trading entity called. The lawsuit also names as defendants a senior Mirana executive from the period and Singapore residents who benefited from or played a role in the FTX withdrawals being investigated in the bankruptcy case, according to the complaint.
Chapter 11 often provides struggling companies with an opportunity to recover funds in the months before filing for bankruptcy. This power prevents certain creditors from gaining an unfair advantage simply because they managed to withdraw their funds from a failing business and others were unable to do so.
The lawsuit filed by Bybit is one of the latest filed by FTX’s new management to recover funds paid out before the company filed for Chapter 11 in November 2022.
In the lawsuit, FTX claimed that it valued the assets withdrawn from its exchange by Bybit and its affiliates based on November 1 pricing. FTX added that it may improve pricing information as legal proceedings progress. The complaint also noted that some legal claims could potentially be subject to “subsequent new value” defenses.
Currently, crypto exchange FTX is also working to revive the exchange, with the former chairman of the NYSE showing keen interest in the exchange. If the exchange manages to recover ByBit funds, it could provide strong financial leverage to restart the exchange. Additionally, the exchange is also selling Solana tokens to bring in more cash.