FTX Legal Fees Surpass 120 Million in Only Three Months

In a Twitter post on Tuesday, June 20, a US-based crypto research platform, the Block, revealed that FTX’s expenses and costs of legal, bankruptcy, and financial advisors exceeded $19.6 million in 2022.

The firms that billed include Sullivan & Cromwell, Quinn Emanuel Urquhart & Sullivan, Landis Rath & Cobb, AlixPartners, and Jefferies. Meanwhile, crypto enthusiasts and former customers are optimistic about a possible exchange reboot amid the regulatory issues around it.

• FTX Financial Crisis Worsens as Financial, Legal, and Advisory Expenses Continue to Increase

The Block Research report shows that expenses and fees accrued by FTX exchange mounted up to $121.8 million. These were from the crumbling exchange’s bankruptcy, legal, and financial costs from February until April.

In just three months, the exchange’s top legal, bankruptcy, and financial advisors billed the organization over $19.6 million in costs for total work hours and work done in 2022. 

In addition, over $10 million emanated from the work performed in November 2022, when Sam Bankman-Fried’s crypto platform was declared bankrupt.

A court-ordered interim compensation scheme instituted that the companies will initially be paid about $15.5 million or more, or circa 80% of the value of their efforts. 

Among the companies that billed FTX are Landis Rath & Cobb, Sullivan & Cromwell, and Quinn Emanuel Urquhart & Sullivan: financial advisor AlixPartners and professional advisor Alvarez & Marsal. The work billed by the firms included handling meetings with other firms that also billed FTX for their time and expertise.

The crypto exchange’s legal partners at Sullivan & Cromwell billed the exchange $37.6 million for the period, totaling 30.9% of the overall fees.

 The restructuring consultants at Alaverez & Marsel charged $37 million, followed by Quinn Emanuel Urquhart & Sullivan, Landis Rath & Cobb, and AlixPartners.

• Possible Turn Around For FTX

Amid the uprising financial crisis of the FTX exchange, former investors are hopeful of a possible turnaround for operations and the value offered to the customers. 

One of the optimistic pundits is the CIO at Ikigai Asset Management, Travis Kling, who once stated that a reboot of the exchange is the best option in a time like this. 

Ikigai was a primary investor and stakeholder at the FTX exchange before and during its crackdown. Another pundit of the FTX relaunch is the anonymous crypto expert and investor by the name of Loomdart. 

Loomdart is one of the leaders of the FTX 2.0 movement, and he believes that the current regulatory crisis faced by Coinbase and Binance provides an excellent opportunity for FTX. Notably, FTI Consulting billed a total fee of $761,997.70 for 686.8 hours on a project titled “Exchange restart.”

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