In a significant development for the FTX bankruptcy estate, the firm reached a $228 million settlement with Bybit on October 24, resolving a 2023 lawsuit aimed at recovering funds for FTX’s former customers and creditors. This agreement allows FTX to retrieve $175 million in digital assets currently held on Bybit’s platform and secure the sale of $53 million in BIT tokens to Mirana Corp, an investment arm of Bybit.

The legal team representing FTX acknowledged that, despite the strength of their claims, ongoing litigation would be a lengthy and costly process. They argued that the case involved complex issues, including disputed asset transfers and potential stay violations.

Pending court approval, a hearing is set for November 20, 2024, where the final green light for the settlement will be determined. This lawsuit was initially filed in November 2023, alleging that Bybit and Mirana had “VIP” privileges, allowing early access to withdraw approximately $327 million in assets from FTX just before its collapse.

The FTX bankruptcy estate has faced numerous legal challenges since the exchange’s collapse, with lawsuits directed at those involved in its operation. Earlier this month, Judge John Dorsey approved FTX’s reorganization plan, marking a pivotal step in the estate’s efforts to stabilize. This approval also led to the withdrawal of a separate lawsuit from FTX creditors against the law firm Sullivan & Cromwell, which faced accusations of profiting from FTX’s collapse while allegedly ignoring warning signs of financial misconduct.

The FTX settlement with Bybit marks a step toward resolving the exchange’s complex legal woes, aiming to expedite relief for FTX creditors as the estate gradually finds its footing in post-bankruptcy proceedings.