Cryptic Recourse: FTX's Legal Odyssey to Reclaim $950 Million from Bybit

Roughly twelve months following its collapse, the once-prominent player in the cryptocurrency sphere has embarked on another endeavor to retrieve assets from external entities.

In this instance, FTX's legal representatives are said to have pursued a former rival, Bybit, seeking to recover cryptocurrencies and cash with an estimated value exceeding $950 million.

As per Bloomberg's account, FTX has initiated legal action against Bybit Fintech Ltd and two of its corporate associates, demanding $953 million in both cash and crypto that supposedly vanished from the now-defunct platform shortly before it sought refuge in bankruptcy protection around mid-November 2022.

The lawsuit, filed on a Friday in Delaware, contends that Bybit's investment wing, Mirana Corp., enjoyed exclusive "special VIP benefits" on FTX, privileges not extended to the majority of clients. This enabled them to withdraw their assets before the platform's collapse the previous year.

The complaint alleges that Bybit exerted pressure on FTX staff to expedite these withdrawals at a faster pace than other users. Notably, approximately one-third of the total sum ($327 million) was withdrawn from FTX between November 7 and 8, a period during which the service was purportedly paused, as stated in the filing.

FTX, basing its valuation on November 1 prices, appraised the collective assets at $953 million. Bybit, self-proclaimed as the "most dependable cryptocurrency exchange" on X, has yet to issue an official response to the legal action.

Post FTX's demise, Bybit, like many other crypto entities during that period, had to trim its workforce by 30%. Conversely, the exchange saw a surge in trading volumes in the initial months following FTX's high-profile crash.

FTX's newly appointed executives and legal team are actively pursuing the recovery of lost funds through diverse channels. This includes Stanford University reimbursing previous donations and FTX initiating legal proceedings against former brand ambassadors such as Naomi Osaka and Shaquille O’Neal.

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