FTX files lawsuit against crypto exchange ByBit to recover $953 million in cash and assets

FTX, amid its own bankruptcy woes, is taking on the cryptocurrency exchange ByBit to recover money that the latter withdrew using “special privileges” as FTX collapsed. On the other hand, the native token of the bankrupt exchange noted one of the highest single-day rises this year as the FTT price shot up by nearly 100%.

FTX sues ByBit

FTX management filed a lawsuit against the cryptocurrency exchange ByBit as well as two other corporate affiliates on Friday. The lawsuit is an attempt from the bankrupt exchange to recover about $953 million from ByBit in the form of cash and digital assets that were withdrawn from FTX prior to the collapse.

Filed in the Delaware court, the lawsuit alleges that ByBit’s investment branch, Miranda Corporation, exploited special VIP privileges that it had at FTX. These privileges were absent for most of the FTX customers, which the alleged parties used to withdraw most of the assets held on the collapsing exchange right before FTX filed for bankruptcy last year.

Per reports from Bloomberg, Miranda pressured FTX employees to complete their withdrawal request earlier than other FTX customers, who had to wait hours before being able to get their money back from the exchange. In fact, of the $953 million, over $327 million were withdrawn by Miranda Corp after FTX halted the withdraws on the exchange.

ByBit has yet to respond to the lawsuit and the claims made by FTX.

FTT price skyrockets to new highs

FTT price continued to stun the market with a 97% rally in 24 hours, the highest noted by any asset in the top 50 cryptocurrency list since the beginning of 2023. The rise added to the increase from the day before, bringing the total gains to 240% in the span of two days.

During the intra-day trading hours, the altcoin also managed to breach a key barrier marked at $4.55 before falling back down below it. Reclaiming this level as a support line could provide some support to the altcoin in cementing the recent increase.

FTT/USD 1-day chart

However, as reported by FXStreet, since the rise is the result of SEC Chair Gary Gensler’s comments and not owing to fundamental development, the rally may not stick. This could lead to a drawdown, erasing the recent gains and bringing the FTT price down to $3.00 or $2.42. Losing the latter level would invalidate the bullish thesis.

Read more - FTT price skyrockets 150% in 48 hours but still makes no dent in recovering FTX bankruptcy losses