Cryptocurrency

Celsius

Cryptocurrency bankruptcy lawyers and advisers at major law firms have amassed over $700 million in fees from significant cryptocurrency bankruptcy cases.
Recent years have seen several major bankruptcy cases, including Sam Bankman-Fried’s crypto exchange FTX Trading Ltd, as well as Genesis Global Capital, BlockFi, Celsius, and Voyager Digital.
These high-profile bankruptcy cases have become a lucrative opportunity for two major law firms involved in the legal proceedings: Sullivan &amp; Cromwell and Kirkland &amp; Ellis.
<h2 id="ftx-lawyers-advisers-score-700-million-in-fees">FTX lawyers, advisers score $700 million in fees</h2>
Sullivan &amp; Cromwell, <a href="https://news.bloomberglaw.com/business-and-practice/crypto-implosions-spark-big-law-with-600-million-haul" target="_blank" rel="noopener noreferrer nofollow">currently managing</a> the case involving Sam Bankman-Fried’s exchange, FTX Trading Ltd, is poised to be the biggest winner. The Bahamas-based cryptocurrency exchange <a href="https://cointelegraph.com/news/ftx-ftx-us-and-alameda-file-for-chapter-11-bankruptcy-in-us-sbf-resigns" rel="noopener noreferrer nofollow">filed for bankruptcy</a> in November 2022 after a surge in customer withdrawals revealed an $8 billion deficit in FTX’s accounts.
<a href="https://www.theblock.co/post/297664/ftx-lawyers-and-advisors-charged-over-500-million-in-bankruptcy-process-so-far" target="_blank" rel="noopener noreferrer nofollow">According</a> to reports, FTX’s bankruptcy has yielded over $500 million in fees for its lawyers and advisers, with total costs soaring. The bankruptcy process administrators have requested an astounding $700 million in fees and expenses. While some of these requests have been reduced by 20%, others are still awaiting approval.
According to court filings, the FTX estate’s special counsel, Sullivan and Cromwell, has received approval for $254 million in fees despite billing $360 million. Financial advisers Alvarez and Marsel follow with $133 million in approved fees.
Other firms and advisers, including AlixPartners, Quinn Emanuel Urquhart and Sullivan, Perella Weinberg Partners, and Landis Rath and Cobb, have collectively charged $57 million.
FTX CEO John Ray III has billed $5.6 million hourly at $1,300, while RLKS Executive Solutions, the estate’s chief officers, has invoiced $26 million.
Separately, the Official Committee of Unsecured Creditors has incurred $81 million in fees and $1.5 million in expenses, while the Ad Hoc Committee has requested less than $5 million in fees.
<h2 id="120-million-for-celsius-voyager-blockfi-counsel">$120 million for Celsius, Voyager, BlockFi counsel</h2>
According to a Bloomberg report, Kirkland and Ellis has likely <a href="https://news.bloomberglaw.com/business-and-practice/kirkland-nets-120-million-in-celsius-blockfi-voyager-work" target="_blank" rel="noopener noreferrer nofollow">earned</a> over $120 million for its role as lead counsel for three major crypto exchanges that filed for Chapter 11 during the peak of cryptocurrency losses in 2022.
In January, Kirkland and Ellis <a href="https://www.bloomberglaw.com/document/X2OTI3OKTO2812OU0RQ3J499MUD" target="_blank" rel="noopener noreferrer nofollow">filed</a> its final fee application for three bankruptcy cases, seeking $76 million for the Celsius case, significantly higher than the $27 million and $16 million earned from the Voyager and BlockFi cases, respectively.
Related: <a href="https://cointelegraph.com/news/ftx-exec-ryan-salame-sentenced-guilty-plea" rel="noopener noreferrer nofollow">Former FTX exec sentenced to 7.5 years in prison after guilty plea</a>
The firm’s total fees for the three cases amount to $120 million, with the Celsius case accounting for the majority
Celsius <a href="https://cointelegraph.com/news/celsius-has-finally-filed-for-bankruptcy-law-decoded-july-18-25" rel="noopener noreferrer nofollow">filed for bankruptcy</a> in July 2022 after the collapse of TerraUSD and its digital currency, Luna. Voyager Digital <a href="https://cointelegraph.com/news/voyager-digital-files-for-chapter-11-bankruptcy-proposes-recovery-plan" rel="noopener noreferrer nofollow">filed for bankruptcy </a>in July 2022, after the hedge fund Three Arrows Capital filed for bankruptcy. BlockFi <a href="https://cointelegraph.com/news/blockfi-files-for-bankruptcy-as-many-expected-cites-ftx-collapse-for-its-troubles" rel="noopener noreferrer nofollow">filed for bankruptcy</a> in November 2022 after FTX, from which it had a $400 million credit line, also filed for bankruptcy.
According to Thomson Reuters Institute data, bankruptcy practices <a href="https://www.thomsonreuters.com/en/press-releases/2023/august/2023-recovery-for-the-law-firm-market-continued-in-q2-thomson-reuters-law-firm-financial-index.html" target="_blank" rel="noopener noreferrer nofollow">experienced</a> a 4.4% year-over-year demand growth in 2023, the highest among all practices, followed by litigation with a 3.2% growth.
Magazine: <a href="https://cointelegraph.com/magazine/deposit-risk-crypto-exchanges-money/" rel="noopener noreferrer nofollow">Deposit risk: What do crypto exchanges really do with your money?</a>

Legal fees skyrocket in high-profile crypto bankruptcies

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