In a recent development, renowned crypto journalist Colin Wu, through Wu Blockchain, revealed that FTX’s bankruptcy advisers have taken legal action against crypto exchange Bybit and its affiliates. The lawsuit, filed in a Delaware court on Friday, November 10, seeks to recover approximately $953 million in cash and digital assets reportedly withdrawn from FTX just before it filed for Chapter 11 a year ago.
According to a recent report, Bybit’s investment arm, Mirana Corp., enjoyed exclusive “VIP” benefits unavailable to most customers. Mirana is accused of leveraging these privileges to swiftly move the bulk of its assets out of FTX before the platform’s collapse in November 2022.
The legal action alleges that Mirana pressured FTX employees to expedite its withdrawal requests, creating delays for regular customers. The primary objective of the lawsuit is to recover assets, including over $327 million allegedly withdrawn by Mirana when FTX paused withdrawals on November 8, 2022.
Bybit, Mirana, And Others Targeted In FTX Bankruptcy Lawsuit
The bankruptcy lawsuit targets Bybit Fintech Ltd., Mirana, and a related crypto-trading entity named Time Research Ltd. It also includes a senior Mirana executive from the relevant period and Singaporean residents allegedly involved in the FTX withdrawals now under scrutiny.
Chapter 11 typically allows struggling companies to reclaim funds before a bankruptcy filing, preventing specific creditors from gaining an undue advantage. Exchange new management has initiated several lawsuits, with this being the latest attempt to retrieve funds disbursed before the company filed for Chapter 11 in November 2022.
In response to the legal complaint, FTX asserted that it evaluated the assets withdrawn by Bybit and its affiliates based on November 1 pricing. The complaint noted that pricing information might be updated as legal proceedings progress, and certain legal claims could be subject to defenses related to “subsequent new value.”
Amidst these legal battles, FTX is actively working towards revitalizing the exchange, garnering interest from the former president of the New York Stock Exchange (NYSE). Successfully recovering funds from Bybit could provide a substantial financial boost to restart the exchange. Additionally, it has been selling its Solana tokens to increase its cash reserves as part of its broader strategy to regain stability.