The FTX bankruptcy estate has filed a lawsuit against cryptocurrency exchange ByBit. The lawsuit seeks to recover nearly $1 billion worth of assets allegedly withdrawn prior to FTX’s collapse. The suit, filed by FTX CEO John J. Ray III, claims ByBit leveraged “VIP” access and connections to withdraw significant funds and digital assets from its investment arm, Mirana Ventures, along with two other affiliated entities, Time Research and ByBit executives. According to the lawsuit, FTX employees kept a spreadsheet tracking withdrawal requests from VIP customers, which resulted in over $327 million being transferred to Mirana from FTX. In total, the value of assets withdrawn by ByBit and associated parties from FTX is estimated at close to $1 billion. The lawsuit alleges ByBit has since imposed restrictions on the FTX bankruptcy estate, preventing withdrawals exceeding $125 million from ByBit’s platform. Separately, the legal action claims the exchange misled FTX in 2021 by stating the decentralized organization BitDAO was community-run when in fact ByBit controlled it.
FTX contends ByBit’s actions violate the automatic stay enacted during its Chapter 11 bankruptcy proceedings. The lawsuit seeks compensatory and punitive damages related to both the frozen assets and the BIT/MNT token scheme.
FTX has filed a lawsuit against ByBit, accusing the cryptocurrency exchange of illegally withdrawing nearly $1 billion worth of assets from its investment arm prior to FTX’s collapse. The lawsuit also alleges that ByBit has imposed restrictions on the FTX bankruptcy estate, preventing withdrawals exceeding $125 million from ByBit’s platform. This is bad news for FTX, as it means the company may not be able to recover a significant amount of its assets. #FTX #ByBit #CryptocurrencyExchange #Cryptocurrency #Chapter11Bankruptcy
You can read more about this topic here: Watcher Guru: FTX Goes After ByBit for ‘VIP’ Withdrawals Nearing $1B