Catenaa, Monday, March 10, 2025 – FTX bankruptcy proceedings have become one of the most expensive in U.S. history, with legal and financial fees nearing $1 billion.
According to a Bloomberg report from February 26, 2025, court records reveal that $948 million has been paid to various law firms and financial consultants.
Despite these high costs, FTX customers are expected to recover 118% of their claims, a rare outcome in corporate bankruptcies.
The fees have been distributed among several firms, with Sullivan & Cromwell LLP, FTX’s lead law firm, receiving over $248.6 million, and financial consultant Alvarez & Marsal paid roughly $306 million.
In comparison, other collapsed crypto firms like Celsius and BlockFi have incurred just $502 million in legal fees combined. FTX’s bankruptcy, which is still ongoing, involves complicated asset recovery efforts due to the company’s poor financial oversight.
John Ray III, FTX’s bankruptcy CEO, noted that he had never encountered a company with such disorganized finances.
Legal expenses in corporate bankruptcies have surged in recent years, with other high-profile cases like Lehman Brothers costing nearly $6 billion in fees. Critics are concerned that rising bankruptcy costs may erode the value creditors receive from restructuring efforts.
The FTX case highlights deeper issues within the crypto industry, where poor financial oversight and a lack of regulatory frameworks have led to costly and prolonged legal battles.
These trends could signal future challenges for other crypto companies facing bankruptcy.
