The collapse of crypto exchange FTX continues to wreak havoc. According to the latest U.S. court filings, FTX spent no less than $118 million on legal and consulting fees between August and October 2023. That’s $1.3 million a day, or $53,000 spent every hour.
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FTX continues to burn millions in legal fees
The fall of crypto exchange FTX continues to leave its mark. Between August and October alone, four major law and consulting firms reportedly billed over $100 million to FTX for their services, according to the latest U.S. court filings.
1.3 million spent per day, or $53,000 every hour : this astronomical sum was swallowed up in just three months! Only in an attempt to manage the chaotic situation of FTX.
The most expensive bill comes from the consulting firm Alvarez & Marsal with no less than 35.8 million invoiced over the period. Next in line are the famous law firms Sullivan & Cromwell (31.8 million) and AlixPartners ($13.3 million), known for their exorbitant fees.
Between them, these legal behemoths took in more than $67 million of the meager finances still available to FTX. Under these conditions, it is difficult to hope for a rapid financial recovery.
Stratospheric legal expenses
These staggering amounts are beginning to intrigue the American justice system. Some unnamed creditors of FTX claim that the total amount of legal fees paid since the opening of the insolvency proceedings would already amount to $350 million.
In a report dated December 5, 2022, fees examiner Katherine Stadler raises serious concerns. She points the finger at overworked staff, excessive attendance at certain meetings, as well as technical and procedural shortcomings in billing hours.
The financial hemorrhage shows no sign of slowing down for FTX. Every day brings astronomical new invoices to add to the company’s already catastrophic balance sheet. Under these conditions, it’s hard to imagine any positive recovery for the once-flourishing crypto exchange.
The process promises to be long and costly. All the more so as FTX’s financial hole, initially estimated at 8 billion, could actually reach 32 billion, according to new revelations. This will put the platform’s meagre remaining assets to the test, in order to compensate its defrauded creditors.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
