FTX’s Asset Recovery Attempts Continue With $950M Lawsuit Filed Against Bybit

Approximately a year after its implosion, the once-crypto giant has taken another step in trying to recover funds from third parties.

In this case, FTX’s legal team has reportedly gone after a previous competitor – Bybit – for cryptocurrencies and cash valued at over $950 million.

• Bloomberg reported that FTX has already sued Bybit Fintech Ltd and two of its corporate affiliates for $953 million in cash and crypto that was supposedly withdrawn from the defunct exchange shortly before it filed for bankruptcy protection in mid-November 2022.
• According to the Friday lawsuit, Bybit’s investment arm – Mirana Corp. – had “special VIP benefits” on FTX, which most other customers didn’t have. This meant that the former had the opportunity to withdraw their assets before it crashed last year.
• The complaint, filed in Delaware, alleges that Bybit pressured FTX staff members to prioritize completing the withdrawals faster than other customers. Approximately a third of the total amount ($327 million) was withdrawn from FTX between November 7 and 8 – at a time when this service was paused, the filing reads.
• According to the complaint, FTX valued the total assets at $953 million using prices from November 1.
• Bybit, which describes itself as “the most reliable cryptocurrency exchange” on X, is yet to officially respond to the lawsuit.
• After FTX’s collapse, Bybit also had to reduce its employee count by 30%, similar to many other crypto companies at the time. On the other hand, the exchange was among the beneficiaries of FTX’s loud crash, as its trading volumes increased in the first several months.
• FTX’s new execs and legal team have been trying to recover lost funds from multiple sources. This includes Stanford University returning previous gifts and FTX launching lawsuits against former ambassadors like Naomi Osaka and Shaquille O’Neal.