FTX’s $228M Win Boosts Customer Payout Schedule
- The FTX bankruptcy estate has been on a litigation spree.
- FTX has reached a settlement with Bybit.
- The exchange’s creditors are still awaiting payday.
With over $11 billion lost in the aftermath of the 2022 FTX collapse , the fate of affected investors has hung in the balance for the past two years. Seeking to overturn the narrative, the FTX bankruptcy estate has ramped up efforts to restore those impacted, leaving no stones unturned in its quest to recover as much funds as possible.
One of its ventures has yielded payday in a boost to its efforts.
FTX and Bybit Settle for Millions
A recent win for FTX in a lawsuit against the crypto exchange Bybit is boosting restoration prospects for creditors who are awaiting restoration. According to an October 24 filing , the FTX Debtors and Bybit have agreed to a settlement that allows the now-defunct exchange to recover as much as $225 million following several months of tussle.
Sponsored
The settlement follows the allegations made by the FTX bankruptcy estate in a November 2023 lawsuit , claiming that Bybit and its affiliate, Mirana, sabotaged the exchange through various tactics, including hindering asset withdrawals and taking actions that devalued its portfolio.
Although the $225 million settlement falls significantly short of the $953 million originally sought by FTX, the debtors emphasized that it restores “substantially everything that they seek to recover” and bolsters ongoing efforts to recoup funds for creditors.
“The Settlement Agreement also allows the Debtors to secure this significant recovery for their stakeholders while avoiding the expense, uncertainty, and burden of continued litigation,” read the filing.FTX’s win against Bybit comes weeks after its settlement with former Alameda CEO Caroline Ellison, in which the ex-executive was mandated to forfeit her personal assets as part of the consequences of her role in the empire’s collapse. The streak of wins comes as the firm ramps up efforts toward compensating creditors.
FTX Targets Creditor Payout
As earlier revealed, the FTX bankruptcy estate aims to start repaying its customers by the end of the year. The plan has resulted in the debtors pulling several strings, including establishing a reorganization plan, asset liquidations , and portfolio shake-ups .
FTX CEO John Ray III previously shared that some creditors may receive up to 118% compensation, with distributions expected to go live within 60 days of court approval.
Following its streak of financial wins, FTX is believed to hold over $16.3 billion for distribution, which sits 50% above its obligations. This suggests the exchange is well-positioned to settle its debts, though it remains to be seen when payday will arrive for its over two million customers and other creditors.
On the Flipside
- The success of the FTX-Bybit settlement is contingent on the court’s approval on November 20, 2024.
- Court recently sentenced Alameda CEO Caroline Ellison to two years behind bars.
- On September 16, 2024, FTX founder and former CEO Sam Bankman-Fried (SBF) filed an appeal to his 25-year prison sentence, alleging unlawful trial proceedings.
Why This Matters
While the specific timeline for creditor settlement remains uncertain, FTX’s $225 million win in its legal battle against Bybit significantly boosts optimism for those awaiting refunds.
Read this article to find out more about recent asset movements by FTX:
FTX & Alameda Dumps WorldCoin to Binance, WLD Falls Below $2
Donald Trump’s odds on a prediction platform recently saw an odd boost; read more here:
Betting Anomaly Shoots Trump’s Odds to 99% on Polymarket
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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