In an ongoing effort to recover assets to repay creditors affected by its collapse in 2022, crypto exchange FTX, once run by 25-year-old Sam Bankman-Fried, has reached an agreement with crypto-based crypto platform Bybit, allowing it to withdraw. property as part of a $228 million settlement.
FTX To Return Funds From Bybit
According to a report According to Bloomberg, the settlement involves FTX dropping its lawsuit against Bybit Fintech Ltd. and related organizations. The company has requested permission from the US Bankruptcy Court for the State of Delaware to complete the deal, which comes after months of negotiations.
Under the terms of the settlement, FTX is scheduled to repay approximately $175 million digital goods held in Bybit and sold BIT tokens to Bybit’s investment arm, Mirana Corp., for approximately $53 million.
The legal dispute stemmed from allegations that Mirana had withdrawn $327 million from FTX shortly before the exchange’s collapse, using “special rights”. At the same time, some users find it difficult to access their funds.
As part of the settlement, defendants who cashed out shortly before FTX filed for bankruptcy will be allowed. creditor applications up to 75% of the account balance at the time of filing for bankruptcy. FTX described the plan as creating “significant capital savings for borrowers.”
FTX expressed confidence in the settlement in its filing, saying, “Through the Settlement Agreement, the Debtors will be getting back everything they want back.”
The company emphasized that this deal will help ensure a strong recovery participants while avoiding the “costs and uncertainties” associated with ongoing litigation and the potential challenges of enforcing the law abroad.
The deal is one of several deals planned by FTX’s new CEO, John J. Ray III, who took over following the exchange’s collapse. Earlier this month, the court approved it ventilation system to distribute at least $12.6 billion to clients whose assets are locked in the platform.
Creditor Payments Expected By Early 2025
As before report by Bitcoinist, Judge John Dorsey since the US Bankruptcy Court approved the reorganization plan that seeks to start paying creditors almost two years after FTX’s collapse.
K33 analysts Vetle Lunde and David Zimmerman indicated that the payment of creditors could start in the last quarter of Q4 2024 and extend to the beginning of Q1 2025. These payments are expected to take place within a window of 60 days from the first day of the court, which is expected to announced in mid-November.
Analysts suggest that Bitcoin (BTC) prices could benefit from this development as currencies are brought back into the market. However, a significant portion of the claims—estimated at between $14.4 billion and $16.3 billion—have already been purchased with debt financing, reducing the likelihood of these assets re-entering the market.
In addition, about 33% of outstanding claims are tied to sanctioned companies and individuals who lack proper know-your-customer (KYC) verification, making those assets impossible to claim.
Taking these factors into account, analysts estimate that about 20% to 40% of the remaining $8 billion may re-enter the market. This prediction depends on the nature of the FTX trader base, which mostly consists of “aggressive, crypto-native risk-takers.”
At the time of writing, the exchange’s native token, FTT, is trading at $1.80.
Featured image from DALL-E, chart from TradingView.com