Recent filings submitted by FTX’s bankruptcy advisors reveal that the bankrupt crypto exchange is facing escalating legal and advisory costs. According to the filings, the exchange’s advisors billed FTX a staggering $121.8 million in fees and expenses for the period between February 1 and April 30. The filings show that law firm Sullivan & Cromwell charged FTX the highest amount of $37.6 million, accounting for 30.9% of the total fees and expenses. Conversely, investment banking firm Jefferies billed the lowest amount, representing only 0.6% of the total costs. In addition, restructuring consultants Alvarez and Marsel charged FTX $37 million, along with over $1.1 million in additional expenses such as meals and accommodation.
FTX 2.0 Coalition Aims to Restart the Exchange
In response to the significant costs associated with FTX’s bankruptcy proceedings, former clients have initiated a movement to reboot the exchange under new leadership. The FTX 2.0 coalition aims to restore value to customers and has garnered support from individuals such as Travis Kling, Chief Investment Officer at crypto hedge fund Ikigai Asset Management. Kling believes that a relaunch would be one of the most positive outcomes for creditors, given the regulatory challenges faced by other major exchanges, including Coinbase and Binance. The movement is spearheaded by the crypto influencer known as Loomdart, who has written extensively about a potential restart of FTX on Twitter. Loomdart has said that a “properly executed FTX 2.0” can greatly reduce the time it will take for creditors to get their money back.
FTI Consulting Billed Fees for Exchange Restart Workstream
FTI Consulting, the firm handling FTX’s bankruptcy proceedings, has dedicated considerable time and billed fees amounting to $761,997.70 for a workstream titled “Exchange restart,” as disclosed in the filings. As the bankruptcy proceedings of FTX continue, the mounting costs serve as a catalyst for efforts to revive the exchange and deliver value back to affected customers. The coming months will determine the fate of FTX and whether it can emerge as a new exchange from bankruptcy, potentially marking a turning point for the embattled platform.
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