- June 23, 2023
- Posted by: [email protected]
- Category:
Bankrupt cryptocurrency exchange FTX is grappling with escalating legal and advisory costs, as revealed in recent filings submitted by the exchange’s bankruptcy advisors. Between February 1 and April 30, FTX was billed an astonishing $121.8 million in fees and expenses by its advisors.
Leading the charge was law firm Sullivan & Cromwell, which charged FTX $37.6 million, accounting for 30.9% of the total fees and expenses. In contrast, investment banking firm Jefferies billed the lowest amount, representing only 0.6% of the overall costs.
Additionally, restructuring consultants Alvarez and Marsal charged FTX $37 million, along with over $1.1 million in supplementary expenses for meals and accommodation.
The substantial costs associated with FTX’s bankruptcy proceedings have spurred a movement among former clients to revive the exchange under new leadership. The initiative aims to restore value to customers and has gained support from individuals such as Travis Kling, Chief Investment Officer at crypto hedge fund Ikigai Asset Management.
Kling expressed on Twitter in March that relaunching FTX would be a positive outcome for creditors, considering the regulatory challenges faced by other major exchanges like Coinbase and Binance.
The movement, known as the FTX 2.0 coalition, is spearheaded by the influential crypto personality Loomdart, who has extensively discussed the potential restart of FTX on Twitter. Loomdart recently emphasized that a well-executed FTX 2.0 could significantly expedite the process of creditors receiving their funds.
Amid these developments, FTI Consulting has dedicated significant time and billed fees totaling $761,997.70 for a workstream titled “Exchange restart,” as disclosed in the filings.
As the bankruptcy proceedings of FTX persist, the mounting expenses serve as a driving force for efforts to revive the exchange and provide value to affected customers. The forthcoming months will likely determine the fate of FTX and whether it can emerge as a reimagined exchange post-bankruptcy, potentially signaling a turning point for the embattled platform.
