In the aftermath of FTX’s collapse, the bankruptcy managers have taken an assertive stance in their pursuit of financial restitution, filing a lawsuit against Bybit, a prominent crypto exchange, and its investment arm, Mirana Corp. The focal point of this legal action revolves around the alleged strong-arming by the bankrupt FTX firm, compelling the defendants to process a staggering $953 million in withdrawals just before its demise.
Mirana Corp.’s Alleged Special Privileges and Coercion
The legal filing contends that Mirana Corp. possessed special privileges that facilitated the withdrawal of assets from FTX. Moreover, it accuses the company of pressuring FTX employees to expedite these withdrawals, with the timing of Mirana’s asset withdrawals notably coinciding with a surge in overall withdrawals leading up to FTX’s collapse.
The lawsuit claims that Bybit, in its position of control over FTX Group assets, used this leverage to coerce FTX.com into prioritizing Mirana’s withdrawals. After FTX.com halted customer withdrawals, Bybit allegedly seized FTX Group assets on its exchange, refusing to release them until Mirana completed the withdrawal of its entire FTX.com account balance.
Expanding the scope of the legal battle, the lawsuit also implicates another crypto trading firm, Time Research Ltd, and a Mirana executive. It suggests that some Singaporean residents may have benefited from these contested withdrawals, adding layers of complexity to the asset recovery efforts.
FTX’s Overall Asset Recovery Endeavors
This legal pursuit aligns with FTX’s broader strategy to recover funds withdrawn in the months preceding its collapse, ultimately aiming for an equitable distribution of assets among all victims of its failure. The bankruptcy processes have already seen FTX recover $7 billion worth of assets, including various cryptocurrencies, through diverse recovery endeavors.
Simultaneously, FTX’s estate is strategically managing its crypto holdings, recently transferring over $300 million worth of assets, including Solana and Ethereum, to exchanges as part of its ongoing efforts to maximize value amidst the intricate web of legal proceedings. As the pursuit of the $953 million asset recovery unfolds, the crypto community watches closely, anticipating the broader implications for the industry’s regulatory landscape.