FTX Legal Fees Amount to $1.3 Million Per Day, Creditors Concerned

FTX
Last updated:
Author
David Pokima
Author Categories
About Author

David is a finance journalist and a contributor to Cryptonews.com with a keen interest in breaking comprehensive, accurate, and reliable blockchain news.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: Adobe

Bankrupt digital asset exchange, FTX has paid hundreds of millions in legal fees in a few months sparking reactions as creditors seek to recover their losses.

Court filings show that over $118 million were billed on the exchange between August and October for professional legal fees with investors and creditors yet to recoup their assets.

The latest expense comes to about $53,000 per hour and over $1.3 million per day on average, court filings show. Aside from lawyers, other professionals like accountants also have fees billed to the company during the bankruptcy proceeding. 

Fees charged by firms 

In one year of the bankruptcy proceedings, fees charged by Sullivan and Cromwell have been making rounds for months with diverse reactions among the crypto community. 

In the marked three months, the firm has charged $31.8 million for professional services with an hourly rate of $1,230. The fees are broken down into electronic discoveries, paperwork, and other legal services. 

While Sullivan and Cromwell billed $31.8 million, Alvarez and Marshall charged the highest at $35.8 million with a total fee of over 109 million. Quinn Emanuel charged $10.4 million in the same time frame while AlixPartners’ bill totaled $13.3 million.

FTX imploded in November 2022 with investor losses in billions leading to wider regulatory scrutiny and falling asset prices. The aftermath led to authorities seeking a way to prevent a repeat of the wider market horror recorded last year to protect investors in the market. 

Several commentators opine that the FTX saga which led to a proliferation of legislations will protect investors better and at the same time limit a full-scale adoption as market sentiment will waver.

Bankruptcy fees accumulate

Recent crypto implosions from macroeconomic factors and internal policies have led to staggering legal and other professional charges at $700 million and counting. 

A report by the New York Times shows how lawyers, accountants, and other professionals raked in $700 million in an unexpected “financial bonanza” amid the debacle. 

FTX remains on top of the ladder in terms of expenses with over $326 million after the exchange and sister company Alameda Research filed for bankruptcy last year. 

According to the report, Alvarez and Marshall raked in $126 million with Sullivan and Cromwell at $111 million while Kirkland & Ellis billed $103 million. As fees ramp up in all bankruptcy cases, filings show increasing paperwork and complex processes alongside large manpower on active cases. 

Despite this, creditors and victims lament the situation calling the fees charged excessive and unnecessary at the detriment of people who have lost their entire savings.

At the time Daniel Friesberg, a 19-year-old investor complained about the number of professionals assigned to cases  “At every hearing, they have an army of people there, and most of them don’t need to be there. You don’t need 20 people taking notes.”

More Articles

Blockchain News
Crypto VC Funding in 2024 Failed to Accelerate Despite Trump-Fueled Price Rally
Shalini Nagarajan
Shalini Nagarajan
2025-02-11 04:29:07
Blockchain News
Ukraine Gov’t Aims to ‘Legalize Crypto’ by Summer This Year – Senior Lawmaker
Tim Alper
Tim Alper
2025-02-11 04:20:40
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors