FTX Demands Bybit To Restore Withdrawn Funds Before Bankrupt Crypto Exchange

FTX demands the Bybit crypto exchange. (Photo; Doc. CoinTurk)

JAKARTA - The FTX crypto exchange that went bankrupt last year because its founder Sam Bankman-Fried (SBF) was suspected of committing fraud. This time FTX seeks to restore public trust and plans to reimburse its customers and creditors.

One of the steps taken by FTX management is demanding Bybit, one of its rivals in the crypto industry, which allegedly made disproportionate disbursement of funds (withdrawal) before FTX closed.

As reported by Bloomberg, FTX filed a lawsuit against Delaware's court last Friday, accusing Bybit and its two affiliated companies, Mirana Corporation and Time Research, of abusing their "special rights" as FTX customers to get disbursement of funds faster than other customers.

FTX alleges that Bybit and its affiliated company withdrew about $953 million in cash and digital assets from FTX before FTX disbursed and filed for bankruptcy under Chapter 11.

The lawsuit also targets a top-level executive Mirana and a Singaporean suspected of being linked to the disbursement. FTX demands that Bybit and its affiliated company return the revoked funds, as well as pay compensation and legal costs.

FTX considers the disbursement as an immoral act and against the law, because Bybit and its affiliated company use confidential information and pressure FTX employees to provide them with profits over FTX losses. FTX argues that the disbursement is detrimental to customers and other FTX creditors, who must wait for the bankruptcy process to get their funds back.

FTX also hopes to take advantage of bankruptcy rules that allow businesses that fail to reimburse spent over a certain period before filing for bankruptcy. This rule aims to prevent certain creditors from getting better treatment than other creditors.

This is not the first lawsuit made by FTX to replace lost funds. Previously, FTX has also sued its former brand ambassadors, such as Naomi Osaka and Shaquille O'Neal, who received donations from FTX and SBF. FTX has also demanded former affiliated employees in Hong Kong, who allegedly stole more than US$157 million (Rp 2.5 trillion) from FTX in a fraudulent manner. In addition, FTX has also received a portion of the donation made by FTX and SBF to Stanford University, amounting to US$5.5 million (Rp 86.2 billion).

On the other hand, FTX still has hopes of bounce back from bankruptcy, with some investors interested in taking over its business. Some of the names mentioned are Tom Farley, former president of the New York Stock Exchange (NYSE), Figure Technologies, a fintech company engaged in blockchain-based lending, and Proof Group, a crypto investment firm focused on social projects.