Coin World News Report:
FTX Trading Limited has reached a $228 million settlement with Bybit Fintech Limited to end the legal battle between the two entities. This move will allow FTX to recover assets from Bybit’s exchange. As part of the deal, the defunct exchange will reclaim $175 million worth of digital assets and sell $53 million worth of BIT tokens to Mirana Corp., the investment arm of Bybit.
The settlement agreement comes after FTX recently obtained court approval for its bankruptcy plan, which allows it to use up to $1.65 billion in assets recovered after the historic collapse to repay its clients. Bankruptcy Judge John Dorsey stated that FTX’s success has made it a model for highly complex bankruptcy proceedings.
FTX secured a victory over Bybit with a $327 million claim, according to reports. FTX continues to seek acceptance from the US Bankruptcy Court in Delaware for the settlement reached with Bybit and others. However, this transaction will enable the collapsed cryptocurrency exchange to recover useful funds.
FTX’s lawsuit claimed that Mirana withdrew $327 million from the exchange prior to the collapse, leaving other users locked out. The settlement agreement indicates that Mirana can apply for up to 75% of the account balances before the bankruptcy. It can bring significant net savings to the debtor’s estate.
It further stated that the exchange of SBF expressed that this transaction will allow them to “substantially recover everything they sought,” securing funds for stakeholders and bypassing the costs and uncertainties of international litigation.
Its CEO, John J. Le III, is pushing forward with the reduction plan. It has obtained court approval to distribute at least $12.6 billion to customers who have been waiting for trapped assets.
FTX will pay $1.65 billion. FTX’s bankruptcy plan has been approved by the court, allowing it to repay its clients. Once the plan takes effect, the platform will now repay 98% of accounts with balances below $50,000 within 60 days.
The plan is based on settlements reached with customers, creditors, US agencies, and foreign liquidators, prioritizing repayment to clients before other competing claims.
Meanwhile, the exchange is still negotiating with the Department of Justice over the $1 billion confiscated during Bankman Fried’s lawsuit. This could bring profits of up to $230 million to FTX shareholders.
It is estimated that as of November 2022 bankruptcy filing, the exchange will have $14.7 billion to $16.5 billion available for repayment, expected to cover at least 118% of the value of customer accounts. FTX was once a top cryptocurrency exchange but collapsed when Sam Bankman Fried used customer funds to pay for high-risk bets at Alameda Research.
