FTX: Massive Legal Fees Spark Reactions
Court filings have revealed that FTX, the bankrupt digital asset exchange, has incurred legal fees of over $118 million between August and October, leaving investors and creditors still seeking to recover their assets. The latest expenses amount to about $53,000 per hour and over $1.3 million per day on average, according to court filings.
Fees Charged by Firms
Sullivan and Cromwell have charged $31.8 million for professional services with an hourly rate of $1,230 in the past three months, while Alvarez and Marshall charged the highest at $35.8 million. Quinn Emanuel charged $10.4 million and AlixPartners’ bill totaled $13.3 million during the same time frame. The total professional fees accumulated in unexpected “financial bonanza” amid the debacle of FTX’s collapse and wider regulatory scrutiny amount to a staggering $700 million and counting.
Bankruptcy Fees Accumulate
FTX remains at the forefront of expenses, with over $326 million in fees after filing for bankruptcy last year. Alvarez and Marshall raked in $126 million, Sullivan and Cromwell at $111 million, and Kirkland & Ellis billed $103 million.
Reactions and Criticisms
Creditors and victims have criticized the situation, calling the fees excessive and unnecessary, especially in light of the fact that people have lost their entire savings. Daniel Friesberg, a 19-year-old investor, complained about the number of professionals assigned to cases, claiming that most of them don’t need to be there and that the excessive fees are to the detriment of those who have suffered losses.
The FTX saga and the proliferation of legislations resulting from its aftermath are expected to better protect investors but may also limit full-scale adoption, as market sentiment is likely to waver. Overall, the massive legal fees incurred by FTX have sparked widespread reactions and raised concerns about the impact on the wider crypto community.
