In the latest development surrounding the collapse of cryptocurrency exchange FTX, the bankruptcy managers have taken legal action against ByBit crypto exchange, its investment arm Mirana Corp, and several executives. The lawsuit aims to recover approximately $1 billion in funds and digital assets that were withdrawn prior to FTX’s downfall.
According to the lawsuit, ByBit and Mirana were allegedly pressured to facilitate the withdrawals and had special privileges to withdraw assets from FTX. The legal action also implicates another crypto trading firm and suggests that Singaporean residents may have benefited from the withdrawals.
FTX has been working diligently to recover funds and has already filed lawsuits against former executives and firms that received funds from them. The company has managed to retrieve $7 billion worth of assets to date and has transferred over $300 million worth of crypto assets to exchanges.
Meanwhile, the price of Bitcoin has been on an upward trajectory, reaching its highest level since May 2022. Market observers attribute this appreciation to the potential approval of spot Bitcoin exchange-traded funds (ETFs) by US regulators. Additionally, the upcoming “halving” of Bitcoin, which reduces miner rewards, is seen as another contributing factor.
Investors now have more avenues to engage with the cryptocurrency market, such as regulated futures and options provided by CME Group. These offerings allow investors to hedge their Bitcoin price risk or gain exposure to the asset. Features like cash settlement in USD, CFTC-regulated contracts, and the ability to short Bitcoin make cryptocurrency futures an attractive option.
Micro Bitcoin futures have witnessed a surge in trading volume, evidencing a growing interest from institutional players. High open interest and the number of large open interest holders demonstrate the increasing involvement of both institutional and retail investors in Bitcoin futures, including through recently introduced ETFs.
Returning to the FTX case, the bankruptcy estate has launched a lawsuit against ByBit, Mirana, and several executives, alleging that ByBit utilized its access and connections with FTX staff to withdraw substantial amounts of cash and assets just before FTX’s collapse. ByBit is further accused of imposing withdrawal limitations on the FTX estate and using the retained assets as leverage for seeking recovery of a remaining balance.
The lawsuit also claims that ByBit misrepresented its control over BitDAO (now Mantle) and attempted to reverse a transaction with FTX. BitDAO allegedly disabled FTX’s token conversion and held a community vote to restrict FTX from converting its tokens, with votes seemingly connected to ByBit executives.
Overall, the legal action seeks compensatory and punitive damages from ByBit, as FTX’s bankruptcy managers strive to recoup the significant funds and digital assets that were withdrawn prior to the exchange’s collapse.
In conclusion, the cryptocurrency landscape continues to witness both groundbreaking developments and challenges. While FTX battles with lawsuits and strives to recover lost assets, the price of Bitcoin experiences upward momentum, portraying a promising outlook for the market.
Disclaimer: This blog post provides information based on available sources and should not be considered financial or investment advice. It is always recommended to conduct thorough research and consult with professionals before making any investment decisions in the cryptocurrency space.
