The FTX bankruptcy estate, led by CEO John J. Ray III, has initiated legal proceedings against ByBit, its investment arm Mirana, and several executives.
The FTX bankruptcy estate, led by CEO John J. Ray III, has initiated legal proceedings against ByBit, its investment arm Mirana, and several executives. The bankrupt exchange FTX is seeking "compensatory and punitive damages" from ByBit to recover funds and digital assets that ByBit allegedly withdrew just before FTX's collapse. The lawsuit claims that ByBit, utilizing its "VIP" access and connections within FTX, withdrew significant cash and digital assets from Mirana, Time Research, and executives, amounting to almost $1 billion in current value.
During FTX's withdrawal challenges in November 2022, FTX employees purportedly prioritized Mirana's substantial withdrawals, totaling over $327 million. ByBit has reportedly imposed restrictions on the FTX estate, limiting withdrawals to $125 million on the ByBit exchange. By doing so, ByBit leveraged these assets to recover an outstanding balance of $20 million that it could not withdraw before FTX's collapse.
The legal action also reveals that ByBit, in October 2021, privately disclosed its control over BitDAO (now Mantle) despite presenting it as a decentralized entity. ByBit later approached FTX in May 2023 with an unconventional proposal to reverse a transaction, leading to disputes and the subsequent rebranding of BitDAO to Mantle.
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