FTX, currently navigating through bankruptcy proceedings, has initiated legal action against cryptocurrency exchange ByBit. The lawsuit, filed in a Delaware court, seeks the recovery of approximately $953 million in cash and digital assets. These assets were allegedly withdrawn by ByBit from FTX using special privileges during the latter’s financial downfall.
The lawsuit centers around ByBit’s investment arm, Miranda Corporation, which, according to the filing, leveraged unique VIP privileges at FTX. These privileges, not available to the general customer base of FTX, reportedly enabled Miranda Corporation to withdraw substantial funds from FTX right before its bankruptcy announcement last year.
Bloomberg reports that Miranda Corporation exerted pressure on FTX staff to prioritize and expedite their withdrawal requests. This action allegedly occurred even after FTX had suspended withdrawals for regular customers, leading to over $327 million being withdrawn post-halt.
As this legal battle unfolds, the native token of FTX, FTT, has seen a remarkable rise in its value. In a span of 24 hours, the token’s price surged by nearly 100%, marking one of the most significant single-day increases among top cryptocurrencies in 2023. The rally briefly propelled FTT above a significant resistance level, although it later receded slightly.
This unexpected rally in FTT’s price adds a complex layer to the ongoing FTX saga. While the token has shown resilience and growth, the legal proceedings and the broader implications of FTX’s bankruptcy continue to unfold. As the situation develops, both the legal outcome of the lawsuit against ByBit and the performance of FTT in the cryptocurrency market is being closely watched by investors and industry observers.