FTX, the bankrupt cryptocurrency exchange, is facing significant legal and advisory costs, with filings revealing that fees and expenses between February 1 and April 30 amounted to $121.8 million.
Data collected by Search Blockexplains that FTX attorneys at Sullivan & Cromwell paid the disbursement $37.6 million during that period, which is 30.9% of its total fees and expenses.
Restructuring advisors cost Alvarez & Marcel $37 million, while investment banking firm Jefferies paid the least, at 0.6% of total fees and expenses. Expenses include various items such as meals, lodging, and miscellaneous expenses.
Restructuring advisors’ claims and compensation occupy a “senior” position, meaning they take priority over other claims, including client deposits, according to The Block Research. This mounting cost of FTX’s bankruptcy has led some former clients to call for the exchange to be restarted under new leadership to ensure value is returned to clients.
Travis Kling, chief investment officer at Ikigai Asset Management, is optimistic about the potential restart, noting that it is “one of the most bullish outcomes possible for creditors.” Ikigai holds the majority of its assets in FTX.
The relaunch movement is led by Loomdart, an anonymous figure who leads the FTX 2.0 coalition. Lumdart believes that the regulatory challenges faced by Coinbase and Binance make the relaunch of FTX more feasible.
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In connection with the exchange’s restart, FTI Consulting spent approximately 686.8 hours and paid an invoice fee of $761,997.70, as stated in the filing.
As FTX continues to grapple with the costs of its bankruptcy, stakeholders are exploring ways to revitalize the exchange and ensure a positive outcome for creditors. The situation remains fluid, and the outcome of FTX’s restructuring efforts will have significant implications for the cryptocurrency industry and its participants.