FTX Crypto Exchange Faces Mounting Legal Costs

In a recent round of compensation filings, it has been revealed that the defunct cryptocurrency exchange FTX has been spending approximately $53,300 per hour on bankruptcy lawyers and advisers in the three months leading up to Oct. 31.

FTX Legal Fees Soar to $118.1 Million

Court filings covering the period from Aug. 1 to Oct. 31 indicate that bankruptcy lawyers have collectively charged a staggering $118.1 million during these three months. This breaks down to an average of $1.3 million per day or $53,300 per hour over the 92-day period.

The largest bill among the legal and advisory services came from the management consulting firm Alvarez and Marshall, which invoiced $35.8 million for its services during the three-month period. Following closely in second place was the global law firm Sullivan & Cromwell, with a total charge of $31.8 million. Sullivan & Cromwell’s hourly rate averaged $1,230.

Global consulting firm AlixPartners billed $13.3 million for professional services related to forensic investigations during this period. Additionally, Quinn Emanuel Urquhart & Sullivan charged $10.4 million. Several smaller advisory firms collectively added up to over $26.8 million in billings.

Total Legal Fees Exceed $350 Million

Figures disclosed by a pseudonymous FTX creditor in a post on social media platform X (formerly Twitter) on Dec. 17 suggest that the total legal fees fully paid since the beginning of the FTX bankruptcy case have reached approximately $350 million.

In a report filed on Dec. 5 by the court-appointed fee examiner, Katherine Stadler, “significant areas of concern” were identified regarding billings submitted by larger advisory firms, including Sullivan & Cromwell and Alvarez & Marshall, between May 1 and June 31. Concerns highlighted include top-heavy staffing, excessive meeting attendance, fees related to non-working travel time, and various technical and procedural deficiencies in time entries.