{"id":195806,"date":"2023-11-12T09:39:19","date_gmt":"2023-11-12T09:39:19","guid":{"rendered":"https:\/\/tokenstalk.info\/?p=195806"},"modified":"2023-11-12T09:39:19","modified_gmt":"2023-11-12T09:39:19","slug":"ftx-files-billion-dollar-lawsuit-against-bybit-over-asset-withdrawals","status":"publish","type":"post","link":"https:\/\/tokenstalk.info\/crypto\/ftx-files-billion-dollar-lawsuit-against-bybit-over-asset-withdrawals\/","title":{"rendered":"FTX files billion-dollar lawsuit against ByBit over asset withdrawals"},"content":{"rendered":"

The FTX bankruptcy estate, headed by CEO John J. Ray III, has filed a lawsuit against ByBit, its investment arm Mirana, and various executives. The aim is to recover funds and digital assets that ByBit withdrew from FTX just before its collapse, with the current value close to $1 billion.<\/p>\n

The suit claims ByBit used its \u201cVIP\u201d access and ties with FTX staff to withdraw significant cash and digital assets from Mirana, Time Research (another entity linked to ByBit), and executives just before FTX\u2019s collapse.<\/p>\n

During FTX\u2019s November 2022 withdrawal difficulties, FTX employees tracked VIP customers\u2019 withdrawal requests in a spreadsheet labeled “VIP Request \u2013 Prioritize (Settlement).\u201d The lawsuit alleges that FTX\u2019s settlement team went to great lengths to prioritize Mirana\u2019s significant withdrawals, resulting in over $327 million in transfers to Mirana. The total value of assets withdrawn by ByBit and its executives from FTX has now reportedly reached almost $1 billion.<\/p>\n

<\/p>\n

The lawsuit claims that ByBit has imposed limitations on the FTX estate, preventing the withdrawal of assets exceeding $125 million on the ByBit exchange. Allegedly, ByBit is using these assets as leverage to seek recovery for a remaining balance of $20 million that it could not withdraw from FTX before its collapse.<\/p>\n

The lawsuit claims that in October 2021, a ByBit executive privately revealed to FTX that the company controlled BitDAO, now known as Mantle, despite presenting BitDAO as a decentralized organization run by community members. Then, in May 2023, ByBit approached the FTX bankruptcy estate about reversing the transaction, even though the value of the BIT tokens, approximately $50 million at the time, far outweighed the value of the FTT tokens, approximately $4 million at the time.<\/p>\n

After FTX rejected the \u201cillogical proposal,\u201d BitDAO swiftly rebranded as Mantle, introducing MNT tokens for BIT holders to convert at a 1:1 ratio. As FTX began its conversion, BitDAO allegedly disabled it and held a \u201ccommunity vote\u201d to decide on restricting FTX from converting its tokens.<\/p>\n

Related: <\/em><\/strong>Ex-FTX execs team up to build new crypto exchange 12 months after FTX collapse: Report<\/em><\/strong><\/p>\n

According to the lawsuit, FTX informed ByBit that the action violated the automatic stay in Chapter 11 bankruptcy. Despite this, the \u201ccommunity vote\u201d passed, with votes seemingly linked to ByBit executives. Notably, the fifth-largest vote came from the wallet \u201cdtoh.eth,\u201d identified as Mirana Ventures, a Mirana subsidiary led by David Toh.<\/p>\n

The legal action is pursuing \u201ccompensatory and punitive damages\u201d from ByBit regarding the token scheme and the assets held on its platform. <\/p>\n

Magazine: <\/em><\/strong>Deposit risk: What do crypto exchanges really do with your money?<\/em><\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The FTX bankruptcy estate, headed by CEO John J. Ray III, has filed a lawsuit…<\/p>\n","protected":false},"author":4,"featured_media":195805,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nFTX files billion-dollar lawsuit against ByBit over asset withdrawals - Tokens Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tokenstalk.info\/crypto\/ftx-files-billion-dollar-lawsuit-against-bybit-over-asset-withdrawals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FTX files billion-dollar lawsuit against ByBit over asset withdrawals - Tokens Talk\" \/>\n<meta property=\"og:description\" content=\"The FTX bankruptcy estate, headed by CEO John J. 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