FTX is suing Bybit for $953 million for fraudulently transferring funds leading up to FTX's bankruptcy filing in Nov. 2022.
According to a news article by Coin Desk, crypto firm FTX is suing Bybit, an exchange platform, in an attempt to recover up to $953 million the company transferred to Bybit's investment arm. The legal complaint suggests that the investment unit received gross transfers from FTX, including digital assets now valued at around $838 million. Almost $500 million of this was moved in the days leading up to FTX's bankruptcy filing in Nov. 2022. The suit also alleges that about $115 million in digital and fiat assets were transferred to affiliates of Bybit and its investment arm Mirana. Recently, former FTX owner Sam Bankman-Fried was found guilty of committing billions of dollars worth of fraud against FTX customers by a New York jury.
In addition to Bybit, FTX has also filed a lawsuit against the parents of Sam Bankman-Fried for misappropriating millions of dollars. The lawsuit alleges that they diverted $10 million and exploited the company's corporate structure for personal gain. "FTX Trading paid $18,914,327.82, for Blue Water, to which Bankman and Fried received title, as well as various expenses related to Blue Water totaling more than $90,000," said the lawsuit documents.
According to New York Times reportage on the issue, John Ray III - a lawyer specializing in restructuring troubled companies - has taken over as CEO of FTX following its bankruptcy in 2022 and Sam Bankman-Fried's resignation. Ray claimed that FTX used software intending to hide misuse of customer funds and managed to access sensitive data through unsecured group emails. While the company has been able to gain back $740 million worth of cryptocurrency from its business, a run on deposits shows that FTX owes its customers over $8 billion, according to the New York Times.
