FTX Files Legal Action Against Bybit to Recover $953M in Alleged 'Misappropriated Funds'

FTX Files Legal Action Against Bybit to Recover $953M in Alleged 'Misappropriated Funds'

13th Nov, 2023

FTX's estate has taken legal action against Bybit, aiming to recover $953 million transferred to Bybit's investment arm, Mirana, and affiliated entities leading up to FTX's November 2022 bankruptcy filing.

Allegedly, these funds were "misappropriated" or transferred under questionable circumstances. The lawsuit, filed in Delaware, targets Bybit Fintech Ltd., Mirana, and key individuals, including Mirana executive Sean Tan. It asserts that Mirana received substantial transfers from FTX.com, valued at approximately $838 million, with $500 million transferred just days before FTX halted withdrawals.

The legal complaint also claims an additional $115 million in digital and fiat assets were transferred to entities and individuals affiliated with Bybit and Mirana, with a significant portion withdrawn shortly before FTX.com and FTX US disabled withdrawals. 

The FTX estate alleges that Bybit enjoyed VIP status on FTX, and in the days leading up to the bankruptcy filing, Mirana and affiliates hurriedly withdrew assets from their FTX accounts. It contends that Mirana used its VIP connections to pressurize FTX Group employees to expedite withdrawals, diminishing funds available for non-VIP customers. The complaint further accuses FTX employees of repeatedly adjusting Mirana's Know-Your-Customer (KYC) settings before the withdrawal suspension. 

The lawsuit seeks the return of assets allegedly "preferentially" or "fraudulently" transferred to Bybit and affiliates, characterizing these assets as currently "held hostage" by the latter. The former management of FTX faces accusations of misappropriating customer funds, with FTX's founder, Sam Bankman-Fried, recently found guilty of fraud against FTX customers by a New York jury and awaiting sentencing next year.


Felix @mecnix

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