Bankrupt cryptocurrency exchange FTX has paid approximately $121.8 million in legal, consulting, and financial services fees and expenses in three months between February 1 and April 30 of this year.
Sullivan & Cromwell Received Over $37M
According to The Block Research, FTX lawyers at Sullivan & Cromwell charged the exchange roughly $37.6 million for the period, representing 30.9% of the total fees and expenses.
Consulting firm Alvarez & Marsal billed the exchange $37 million. Out of this payment, $1.1 million was for expenses, including $51,225 for meals, $149,155 for lodging, and $1,995 for miscellaneous items.
The research revealed that investment banking firm Jefferies charged FTX the lowest amount, accounting for just 0.6% of the total fees and expenses. However, the report did not mention the exact amount.
Commenting on the report, The Block Research’s Greg Lim highlighted that FTX’s restructuring advisors’ claims have a higher priority than others in the bankruptcy case.
“As restructuring advisors, their claims and compensation sit on top of other claims and are ‘super senior’ to the unsecured claims bucket which includes customer deposits,” Lim said.
Advisor’s Fee Payments Continue to Rise
The latest revealed staggering figure adds to the significant amount of money already paid to these advisors as part of FTX’s bankruptcy proceedings, which started in November of 2022. Since filing for bankruptcy, the exchange has paid out millions of dollars to its advisors, including Sullivan & Cromwell, Alvarez & Marsal, AlixPartners, and others.
The mounting fees have raised concerns among FTX customers, who believe it could eat into the value of their assets in the long run. Moreover, this situation has led some of FTX’s former clients to push for a restart of the exchange under new leadership.
According to a statement from Travis Kling, the chief investment officer at Ikigai Asset Management, which held a major stake in FTX, a relaunch would be “one of the most bullish outcomes possible for creditors.”
