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FTX’s Bankruptcy Managers Pursue $953 Million Asset Recovery

2 mins
Updated by Bary Rahma
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In Brief

  • FTX's bankruptcy managers have launched a legal action against Bybit to recover $953 million in assets allegedly withdrawn before its collapse
  • The lawsuit claims that Bybit coerced FTX into processing these withdrawals and alleges special privileges for Mirana Corp in asset withdrawal.
  • The bankrup firm continues effort to recover assets that were mismanaged under the former leadership of Sam Bankman-Fried.
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FTX’s bankruptcy managers have initiated legal action against Bybit crypto exchange and two other entities, pursuing the recovery of $953 million in assets withdrawn before its collapse.

This move follows recent efforts by the bankruptcy managers to reclaim the exchange’s funds from various parties.

Lawsuit Against Bybit

On November 10, bankruptcy advisers filed a lawsuit against Bybit and its investment arm, Mirana Corp. The bankrupt firm allegedly strong-armed the defendants into processing $953 million in withdrawal before its collapse.

The filing alleges that Mirana Corp. had special privileges enabling the withdrawal of assets from FTX and further claims that the company pressured FTX employees to facilitate these withdrawals. The timing of Mirana’s asset withdrawals coincided with a surge in withdrawals leading up to FTX’s collapse.

Part of the filing reads:

“Defendant Bybit also used its control over FTX Group assets as an additional source of leverage to try to force to push Mirana to the front of the line. After the exchange halted customer withdrawals, Bybit seized FTX Group assets held on Bybit’s exchange, refusing to release them unless and until Mirana was able to finish withdrawing the entire balance of its account.”

The lawsuit’s primary objective is to recover the approximately $953 million in assets Mirana withdrew from FTX, including over $327 million allegedly withdrawn between November 7 and 8 last year.

The lawsuit also implicates another crypto trading firm, Time Research Ltd, and a Mirana executive. It suggests that some Singaporean residents may have also benefited from these withdrawals.

FTX’s Asset Recovery Efforts

The lawsuit aligns with FTX’s efforts to recover funds withdrawn in the months preceding its collapse. According to the firm, this would enable an equitable distribution of assets among all victims of its failure.

Since its bankruptcy processes began, FTX has recovered $7 billion worth of assets, including cryptocurrency, from various recovery endeavors.

Besides that, it has filed various lawsuits, including one against its former executives like Sam Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh.

The failed firm has also filed lawsuits against several firms, including K5 Global, that received funds from it.

FTX Assets
FTX Asset Movement as of November 8. (Source: Lookonchain)

Meanwhile, FTX estate is also moving to maximize its crypto holdings. The firm has transferred over $300 million worth of crypto assets, including Solana and Ethereum, to exchanges as of November 8.

Top crypto platforms in the US | February 2024



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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.