The legal and advisory bills for the defunct cryptocurrency exchange FTX are rapidly accumulating, with data showing that between February 1 and April 30, advisory fees and costs totaled a staggering $121.8 million.
According to data from The Block, legal representation from Sullivan & Cromwell was a significant contributor to the expenses, with the firm billing FTX $37.6 million for the period. The sum constituted nearly 31% of all fees and costs, far above the 0.6% from investment banking firm Jeffries, which invoiced the smallest amount.
Further contributing to these costs, restructuring consultants from Alvarez and Marsel billed $37 million, supplemented by over $1.1 million in expenses that encompassed $51,225 in meals, $149,155 in lodging, and other miscellaneous expenditures totaling $1,995.
In the midst of the spiraling costs of FTX’s bankruptcy, momentum is building among some of its former clients to resurrect the exchange under new leadership, intending to return value to its creditors.
Travis Kling, the Chief Investment Officer at Ikigai Asset Management, has previously referred to such a reboot as “one of the most bullish outcomes possible for creditors.” Notably, Ikigai had a majority of its assets on FTX.
According to filings, FTI Consulting dedicated approximately 686.8 hours to a workstream labeled “Exchange restart,” incurring fees of $761,997.70. FTX, once a $32 billion cryptocurrency darling, was a popular platform for buying and selling crypto, until financial instability concerns triggered a rush of customer withdrawals amounting to billions of dollars.
The withdrawal rush revealed the exchange did not have customers’ funds readily available, and prompted a halt on all withdrawals that left cryptocurrency investors uncertain if they would rever recover their funds from the exchange.
The collapse of FTX, as reported by CryptoGlobe, was due to control failures and mismanagement by FTX Group’s previous management team in areas such as finance, accounting, and cybersecurity, which led to a lack of records and misuse of customer funds.
FTX’s spectacular fall has had a devastating impact on over a million users, according to Rep. Maxine Waters, D-Calif., who said many were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds.”
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