The bankruptcy proceedings of FTX in the U.S. have led to legal costs nearing $1 billion, as efforts continue to manage digital assets and cash flows linked to the collapsed cryptocurrency exchange.
Major Legal Costs Incurred
Recent reports indicate that legal representatives have billed approximately $948 million by early January. Court documents reveal that approved fees have exceeded $952 million, with prominent law firm Sullivan & Cromwell LLP receiving around $248.6 million, while financial advisory firm Alvarez and Marsal has billed nearly $306 million.
Progress of the Litigation Process
Customer representatives have claimed fees totaling about $110.3 million. John Ray’s consulting firm, which manages the post-collapse proceedings, has earned more than $8 million thus far. Legal teams are diligently tracking the accounts and assets related to FTX as the case progresses.
Asset Management and Compensation Plans
A customer reimbursement initiative was launched in February to better monitor the estate’s assets. Despite the staggering legal fees, experts emphasize that these expenses are essential for accurately tracking substantial sums of cryptocurrency and cash. The FTX bankruptcy is reportedly being handled more cost-effectively than the historically significant Lehman Brothers case. Customer reimbursements are expected in April and May via Kraken and BitGo.
The ongoing situation highlights asset management during bankruptcy and the framework for reimbursement plans. As developments continue, further efforts will be focused on tracking additional assets and accounts linked to FTX.
