FTX Sues Bybit to Recover $1 Billion: An Untold Story Revealed

FTX Sues Bybit to Recover $1 Billion: An Untold Story Revealed

ExchangeCrypto Firm

By Miles

12 Nov 2023

2 min read

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FTX estate sues ByBit to recover $1B withdrawn pre-crash, complaining about unfair token deals and votes.

FTX’s bankruptcy leader sues ByBit to get back nearly $1 billion that was moved before FTX's crash.

During FTX’s November 2022 withdrawal difficulties, FTX employees tracked VIP customers’ withdrawal requests in a spreadsheet labeled "VIP Request – Prioritize (Settlement).” The lawsuit claims that FTX’s settlement team went to great lengths to prioritize Mirana’s significant withdrawals, resulting in over $327 million in transfers to Mirana. Mirana which is the investment arm of Bybit, reportedly had a total value of $1 billion assets withdrawn from FTX

In October 2021, according to the lawsuit a Bybit executive revealed to FTX that their company controlled BitDAO now Known as Mantle even if BitDao was displayed to be controlled by the community

ByBit's offer to reverse a deal: In May 2023, ByBit wanted to trade back some tokens with FTX, but their offer didn't make financial sense. The BIT tokens they wanted to give back were worth $50 million, much more than the FTT tokens they wanted, worth $4 million at the time.

When FTX said no to ByBit's offer, BitDAO quickly changed its name to Mantle and made new MNT tokens for BIT holders to convert at a 1:1 ratio . FTX tried to exchange its BIT tokens, but BitDAO stopped the process and asked its community to vote on whether FTX should be allowed to trade. The voting did not favor FTX

The lawsuit says this vote was unfair because it happened after FTX had declared bankruptcy, and it looks like ByBit's own people helped decide the outcome. One big vote came from a wallet connected to ByBit's investment branch.

FTX demands compensation: The lawsuit is asking for money for the trouble ByBit caused and for holding onto assets on their exchange that FTX claims to be theirs

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