FTX Reaches $228M Settlement With Bybit, FTT Crashes

FTX has reached a cash settlement with Bybit to support repayment to its creditors.

According to filings, FTX reached a $228 million cash settlement from Bybit involving $175 million in assets held in Bybit accounts and Bybit agreeing to purchase 105.4 million FTX debtor's BIT tokens for $52.7 million.

This agreement, as the settlement states, "allows the Debtors to recover significant value for their illiquid and difficult-to-monetize holdings of a volatile asset."

FTX had initially sought $953 million from Bybit, claiming there were "misappropriated funds" in the days leading up to its collapse.

The bankrupt exchange received approval from a US court for its bankruptcy plan to repay customers on 7 October. The ruling allows FTX to use the $16.5 billion it managed to recover.

Between $14.7 billion and $16.5 billion is being used to repay customers, which is enough to repay at least 118% of their account values based on FTX's estimates.

However, repayment will be based on 2022 cryptocurrency values, leaving some customers disgruntled because prices have surged since then. Bitcoin has risen from $16,000 in November 2022, when the exchange collapsed, to over $70,000 today.

FTX will prioritise its customers in the repayment strategy, ahead of creditors and government agencies. Customers who held $50,000 or less on the platform will receive 98% of their assets within 60 days after the plan's effective date.

Commenting on the final plan, FTX's liquidation CEO John Ray expressed appreciation, stating, "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."

He thanked FTX's customers and creditors for their patience throughout this process, with the plan expected to recover as much as "$16.3 billion in assets."

News of the FTX settlement triggered a crash in the price of its token, FTT, which is down almost 9% this week.