The Background of the Case
In a dramatic escalation of the ongoing FTX saga, the bankrupt exchange’s estate, led by CEO John J. Ray III, has cast a wide net, snagging Bybit and its investment arm Mirana into its legal fray. The objective? To recover funds and digital assets that were reportedly whisked away in the chaotic moments leading up to FTX’s collapse. With the stakes now approaching a staggering $1 billion, this legal showdown promises to unveil more layers of intrigue.
VIP Access and Premium Withdrawals
The heart of the lawsuit reveals allegations that Bybit leveraged its “VIP” access to deprioritize the withdrawal troubles that plagued FTX in November 2022. A spreadsheet titled “VIP Request — Prioritize (Settlement)” was the alleged backstage pass that allowed Mirana to pull an astounding $327 million in assets from FTX, while others were left watching in despair. Imagine being stuck at a crowded event while someone gets a free backstage tour!
Asset Withdrawal Controversies
Adding fuel to the fire, the lawsuit claims Bybit has placed restrictions on the FTX estate regarding asset withdrawals above $125 million on its platform. The irony? These assets are purportedly being used as leverage to seek recovery on a mere $20 million that Bybit couldn’t withdraw prior to the grand financial disaster. Trying to win at poker with someone else’s chips? Seems a bit fishy!
The BitDAO Connection
The drama thickens with the allegation that Bybit’s executive previously misrepresented the control over BitDAO (now known as Mantle) during a private discussion with FTX in October 2021. Bybit initially pitched BitDAO as a community-driven affair, all while pulling the strings behind the curtain. Fast forward to May 2023 when Bybit attempted to reverse a transaction with the FTX estate, only to be rebuffed. FTX’s firm refusal to chill on this “illogical proposal” saw BitDAO rebrand swiftly, restricting FTX from turning their tokens into anything resembling cash flow.
The Community Vote Shenanigans
In a twist that could only be described as soap opera-worthy, the “community vote” in BitDAO to prevent FTX from converting its tokens seems to have been choreographed by Bybit executives. Notably, one key vote arrived from a wallet identified as Mirana Ventures, with connections to none other than David Toh. Suspicious? Absolutely! Even FTX had to yell a hearty “violation!” at the alleged circumvention of bankruptcy protections.
The Legal Pursuit
The lawsuit is not pulling any punches, demanding “compensatory and punitive damages” against Bybit for their actions relating to the token situation as well as the assets held on its platform. It’s like watching a legal heavyweight bout unfold in real-time—with all the tension and drama of a prime-time TV thriller.
