The FTX bankruptcy checked off another major cash settlement, this time for more than $200 million from crypto exchange Bybit.
The influx of cash will serve the already-approved FTX dispersal plan in which the recovery of as much as $16.3 billion is soon heading toward former customers and creditors.
The costly meltdown of global exchange FTX is still settling big chunks of its bankruptcy drama, now securing about $228 million from Bybit to further feed the cash dispersal that was approved in court earlier this month.
In its latest settlement, FTX is recovering $175 million in assets held in Bybit accounts and an agreement that Bybit would purchase the FTX debtors’ BIT tokens for about $53 million. The latter “allows the Debtors to recover significant value for their illiquid and difficult-to-monetize holdings of a volatile asset,” the settlement noted.
The FTX estate had originally sought $953 million from Bybit when it first sued the crypto exchange almost a year ago, trying to claw back what it characterized as “misappropriated funds” in the days before FTX collapsed.
On October 7, the federal bankruptcy court approved a final plan for closing out the recovery, estimating repayments to former FTX customers and creditors at an average of 118% (and in some cases much more) of what they held when the company filed for bankruptcy in November of 2022. While that number seems high, crypto assets have jumped dramatically in price while that money was locked up – in the case of bitcoin, for instance, (BTC) has moved up 304%. Creditors will not see those gains.
The cash payouts were meant to happen “within 60 days,” FTX said.
Last year, the FTX liquidators also struck a deal with Genesis to get $175 million – much less than the $4 billion it was originally after.
“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” the bankrupt FTX’s liquidation CEO John Ray said in a statement when the final plan, which was based on a recovery of as much as $16.3 billion in assets, was announced in May. “I want to thank all the customers and creditors of FTX for their patience throughout this process.”
