The company, once run by Sam Bankman Freed, a 25-year convict, has disappeared amid ongoing efforts to recover assets to repay creditors affected by the 2022 bankruptcy. Cryptocurrency exchange FTX has reached an agreement with UAE-based cryptocurrency platform Bybit, allowing it to exit. The assets were transferred as part of a $228 million settlement.
FTX to recover funds from Bybit
According to report According to Bloomberg, the settlement includes FTX dropping its lawsuit against Bybit Fintech Ltd and related entities. The company is seeking approval from the U.S. Bankruptcy Court for the District of Delaware to finalize the agreement, which comes after months of negotiations.
Under the terms of the transaction, FTX expects to collect approximately $175 million. digital assets Bybit and will sell the BIT token to Mirana Corp., Bybit's investment arm, for approximately $53 million.
The legal dispute stems from allegations that Milana used “special privileges” to withdraw $327 million in assets from FTX shortly before the exchange collapsed. At the same time, other users also had trouble accessing their funds.
As part of the settlement, defendants who withdrew funds just before FTX filed for bankruptcy will be allowed to do so. Creditor's claim Equivalent to 75% of the account balance at the time of filing for bankruptcy. FTX explained that the arrangement would result in “significant net savings to the debtor's estate.”
“Through the settlement agreement, the debtor will recover substantially everything it wishes to recover,” FTX said in a filing, expressing confidence in the settlement.
The company emphasized that this agreement will help ensure a significant recovery for the company. stakeholders while avoiding the “costs and uncertainties” associated with ongoing litigation and potential law enforcement challenges overseas.
The settlement is one of several negotiated by FTX's new CEO, John J. Ray III, who took the helm after the exchange's collapse. Earlier this month, the court approved the idea. relax plan Distribute at least $12.6 billion to customers whose assets are locked up on the platform.
Payments to creditors are expected by early 2025
as before reported According to Bitcoinists, U.S. Bankruptcy Court Judge John Dorsey has approved a restructuring plan that aims to start repaying creditors nearly two years after FTX collapsed.
K33 analysts Vetr Lunde and David Zimmerman predict payments to creditors will begin late in the fourth quarter of 2024 and could be extended to early first quarter of 2025. . These payments are expected to be made within 60 days of the court's effective date and will be announced in mid-November.
Analysts suggest: Bitcoin (BTC) price is likely to benefit from these trends as funds are returned to the market. However, the bulk of the debt (estimated at $14.4 billion to $16.3 billion) has already been purchased by credit funds, reducing the likelihood that these assets will re-enter the market.
Furthermore, approximately 33% of remaining claims are associated with sanctioned entities and individuals without proper know-your-customer (KYC) verification, making it unlikely that these assets will ever be recovered. is.
Considering these factors, analysts estimate that about 20% to 40% of the remaining $8 billion could re-enter the market. This prediction hinges on the nature of FTX's trader base, which is primarily comprised 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
