FTX claims that Bybit’s affiliate, Mirana, misused its “VIP” status to withdraw funds amounting to $327 million prior to FTX’s temporary suspension.
Bankruptcy advisors representing FTX have initiated legal action against cryptocurrency exchange Bybit Fintech Ltd. and two associated corporate entities. The lawsuit aims to reclaim a total of $953 million in cash and digital assets that were withdrawn from Sam Bankman-Fried’s crypto exchange shortly before it filed for Chapter 11 bankruptcy protection in November 2022.
According to the lawsuit filed in Delaware court on Friday, Bybit’s investment arm Mirana Corp. had “VIP” benefits that gave it special privileges on FTX, including the ability to withdraw assets from the platform more quickly than other customers.
The lawsuit alleges that Mirana used these privileges to withdraw most of its assets before FTX’s collapse in November 2022, leaving other FTX customers unable to access their funds. This has raised concerns among industry observers about the preferential treatment of certain customers and the risk of insider trading.
According to Bloomberg, the lawsuit alleges that Mirana pressured FTX employees to process its withdrawal request ahead of other customers, who had to wait hours for their funds. In addition, after FTX suspended withdrawals, Mirana withdrew an additional $327 million from the exchange.
ByBit has not yet commented on the lawsuit or FTX’s allegations.
Former NYSE president plans FTX revival
According to the Wall Street Journal, three potential buyers have emerged in the race to acquire FTX. Former NYSE president Tom Farley is leading the charge with his crypto exchange, Bullish. Two other parties, Crypto VC firm Proof Group and fintech startup Figure Technologies, are also in the running. It remains unclear who will emerge as the successful bidder, or whether any of these bids will succeed.
Surprisingly, the report brings to light FTX’s vast appeal, with 70 potential buyers expressing interest. However, among the final candidates vying for ownership, Bullish, Proof Group, and Figure Technologies have emerged.
A buyer is expected to be chosen in December, paving the way for a potential revival of FTX’s operations once it exits bankruptcy in 2024. Nonetheless, the report raises an intriguing possibility – the potential emergence of another buyer before the deal is finalized, introducing an element of uncertainty into the equation.
Should an FTX resurgence come to fruition, affected customers might find solace in the form of compensation, which could be provided through shares or tokens. As stated in reports by WSJ, FTX currently finds itself indebted to customers in the amount of $9 billion.
