The defunct crypto exchange FTX is facing skyrocketing legal and advisory bills as it grapples with its bankruptcy proceedings.
Recent data reveals that between February 1 and April 30, the exchange incurred a staggering $121.8 million in advisory fees and costs.
Leading the pack in terms of expenses is legal representation from Sullivan & Cromwell, billing FTX a substantial $37.6 million during this period.
As restructuring consultants from Alvarez and Marsel added $37 million to the mounting costs, other miscellaneous expenditures pushed the total even higher.
Amidst this financial turmoil, efforts are underway to resurrect FTX under new leadership, with the aim of restoring value to its creditors.
The Block’s data highlights the significant contributions to FTX’s expenses, with Sullivan & Cromwell’s legal representation accounting for nearly 31% of the total fees and costs, amounting to $37.6 million.
In comparison, investment banking firm Jeffries billed the smallest amount at 0.6%. Restructuring consultants from Alvarez and Marsel added another $37 million to the mounting costs. Additional expenses included meals, lodging, and miscellaneous expenditures totaling over $1.1 million.
Amidst the growing financial strain, a movement is gaining momentum among former clients of FTX to revive the exchange under new leadership.
Travis Kling, the Chief Investment Officer at Ikigai Asset Management, has expressed optimism about this prospect, considering it one of the most bullish outcomes for creditors. Ikigai itself had a majority of its assets on FTX.
FTX’s downfall had a profound impact on its user base, numbering over a million individuals. Many of them were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to witness their funds vanish within seconds.
The collapse was attributed to control failures and mismanagement by FTX Group’s previous management team, resulting in financial instability, a lack of records, and the misuse of customer funds.