The
entities overseeing the bankruptcy process of crypto platform FTX have filed a
lawsuit accusing Mirana Corp, an investment arm Bybit, of receiving a
substantial portion of $935 million in transfers just before FTX filed for
Chapter 11 bankruptcy. The lawsuit alleges that these transfers were “made
with the intent to hinder, delay or defraud FTX.com’s present or future
creditors.”
FTX’s
bankruptcy managers argue that these transfers to Mirana Corp, Time Research,
and specific individuals should be classified as fraudulent under Section
548(a)(1)(A) of the Bankruptcy Code. Such fraudulent transfers would give FTX a
legal basis to seek the return of the full amount of these transfers, along
with interest, for the benefit of FTX’s bankruptcy estates.
According
to the lawsuit, Mirana Corp received assets worth $837,815,847, while Time
Research was allocated $47,995,279. The lawsuit notes that FTX’s claims against
both Mirana and Time Research may be subject, in part, to a ‘subsequent new
value,’ depending on the value of deposits made into these entities’ FTX.com
accounts after the preferential transfers.
The
legal action not only targets Bybit’s investment arm but also accuses the
crypto exchange platform of refusing to honor transfer requests on behalf of
FTX debtors. Instead, Bybit is alleged to have demanded the release of
approximately $20 million that Mirana Corp was unable to withdraw before FTX
disabled withdrawals on November 8, 2022.
The
lawsuit contends that FTX, through entities it controls, holds assets worth
$125 million at Bybit. While there is no dispute over FTX’s ownership of these
funds, the lawsuit claims that Bybit is effectively “holding these assets
hostage” in an attempt to pressure FTX into bypassing the bankruptcy
process.
To
ensure the transfer of these funds to the debtors’ estate, FTX’s bankruptcy
managers have stated their intention to “seek judicial enforcement of
their rights under the Bankruptcy Code.”
FTX Debtors’ Lawsuit Seeks Recovery of $935 Million ‘Fraudulently’ Transferred to Bybit’s Investment Arm #crypto #cryptocurrency #cryptoexchanges https://t.co/mP2Om3FOuX
— Bitcoin.com News (@BTCTN) November 13, 2023
Mirana
Asset Management in Bybit’s Investments
In
an earlier report, Finance Magnates
wrote, Bybit
would temporarily suspend US dollar withdrawals starting on March 10 due to
a service outage of its processing partner. Withdrawals via Wire Transfer
(including SWIFT) would also be halted at the same…
