Bankrupt cryptocurrency exchange FTX has reached a $228 million settlement with Bybit, moving a step closer to refunding customers affected by its massive 2022 crash.
As part of the settlement, FTX will drop its lawsuit against Bybit and recover a significant portion of the disputed funds.
The deal sees FTX buy back $175 million worth of digital assets from Bybit’s platform. In addition, Bybit’s investment arm Mirana Corp. will also purchase additional assets from FTX, including BIT tokens, for $53 million.
The legal dispute, which began last year, stemmed from allegations that accounts linked to Bybit transferred $327 million from FTX just before its collapse. The sudden outflow of funds left many other FTX customers without access to their assets. FTX’s legal team has sought to recover those funds to address the shortfall faced by its creditors.
“Thanks to the Settlement Agreement, the Debtors will have recovered substantially everything they wanted to get back,” FTX said in a statement.
The settlement is a significant step in FTX’s broader efforts to reimburse customers affected by its collapse. Earlier this month, a court approved FTX’s repayment plan, which sets aside at least $12.6 billion for distribution. But the payments are contingent on logistics being completed in multiple jurisdictions involved in the case.
According to FTX’s plan, payments are expected to begin within 60 days of the plan’s implementation, with the final decision still pending. While refund amounts will be based on cryptocurrency valuations from two years ago, FTX’s leadership, led by CEO John Ray, is actively working to resolve the complexities of the global payment process.
*This is not investment advice.