FTX Bankruptcy Team Sues Crypto Exchange Bybit for $1 Billion – What’s Going On?

cryptonews.com:

FTX’s bankruptcy advisers have filed a lawsuit against crypto exchange Bybit Fintech and its two affiliated companies.

The lawsuitaims to recover approximately $953 million worth of cash and digital assets that were withdrawn from Sam Bankman-Fried‘s FTX exchange prior to its Chapter 11 filing a year ago.

The lawsuit, filed in a Delaware court on Friday, alleges that Bybit’s investment arm, Mirana Corp., enjoyed special “VIP” benefits that were not available to most FTX customers.

It claimed that Mirana exploited these privileges to withdraw a significant portion of its assets from Bankman-Fried’s platform just before its collapse in November 2022.

According to the complaint, Mirana exerted pressure on FTX employees to fulfill its withdrawal requests while regular customers of FTX.com were left waiting for hours to access their funds as the exchange faced imminent collapse.

The lawsuit seeks to recover assets amounting to around $953 million, including more than $327 million that Mirana allegedly withdrew from FTX between the early morning of November 7 and November 8, 2022, when FTX paused withdrawals.

The bankruptcy lawsuit names Bybit Fintech Ltd., Mirana, and affiliated crypto trading firm Time Research Ltd. as defendants.

It also lists a senior Mirana executive and Singaporean residents who allegedly benefited from or played a role in the FTX withdrawals, which are now subject to the bankruptcy proceedings.

Chapter 11 bankruptcy typically grants failed companies the opportunity to recover funds in the months leading up to the filing.

This provision is designed to prevent certain creditors from benefiting unfairly simply because they were able to withdraw their funds from a failing business while others could not.

FTX said in