Between February 1 and April 30, the bankruptcy estate for FTX paid $121.8 million in legal, counseling, and financial services fees and costs.
The bankrupt cryptocurrency exchange FTX is racking up increasing expenditures for legal and advisory services.
JUST IN: FTX’s bankruptcy estate paid $121.8 million in legal, consulting and financial services fees and expenses between February 1 and April 30.#FTX #Bitcoin #Crypto #FTXExchange pic.twitter.com/rG8ao6jKgs
— WhaleWire (@WhaleWire) June 19, 2023
Block Research compiled data on the fillings made by FTX‘s advisors on June 15 and found that between February 1 and April 30, fees and costs added up to $121.8 million.
For the time period, FTX lawyers at Sullivan & Cromwell charged the exchange, which went bankrupt, $37.6 million. Specifically, this was 30.9% of all fees and costs. Moreover, Jefferies, an investment banking firm, charged the least, which was 0.6% of all the fees and costs.
Alvarez and Marsel’s restructuring consultants charged $37 million, and their costs came to more than $1.1 million. They spent $51,225 on meals, $149,155 on lodging, and $1,995 on other small items.
According to Block Research’s Greg Lim, “As restructuring advisors, their claims and compensation sit on top of other claims and are ‘super senior’ to the unsecured claims bucket which includes customer deposits.”
New Legal Leadership
As the costs of FTX‘s bankruptcy keep going up, some of the company’s former clients are pushing for a new beginning for the exchange. However, they want the new start under different leadership. This would give the customers their value back.
The chief investment officer at Ikigai Asset Management, Travis Kling, once said that a reboot is “one of the most bullish outcomes possible for creditors.” Most of Ikigai’s assets were held on the FTX.
Loomdart, a crypto personality who prefers to remain anonymous, is the project manager of the FTX 2.0 coalition. He thinks that the problems Coinbase and Binance are having with the Securities and Exchange Commission (SEC) make a restart more likely.
Files show that FTI Consulting spent about 686.8 hours and charged $761,997.70 for a workstream called “Exchange restart.”
