FTX Financial Woes Deepen as Advisory and Legal Costs Continue to Escalate.
According to The Block Research, FTX, the estranged crypto exchange, continues to feel financial pain based on ballooning advisory and legal costs and fees.
Despite filing for bankruptcy late last year, FTX has tried to resurrect and untag itself from wrongdoing. As a result, the exchange has paid a whopping $121.8M in consulting and legal expenses between February and April this year.
As restructuring remains top of mind for FTX, claims in this area continue to surge.
For instance, the restructuring team at Alvarez and Marsel slapped the exchange with a $37M bill. On the other hand, Sullivan & Cromwell law firm charged legal fees worth $37.6M.
Is there Light at the End of the Tunnel for FTX?
The crypto community got a rude shock in November last year, as one of the top cryptocurrency exchanges at the time filed for bankruptcy based on a looming liquidity crisis.
This was based on FTX’s inability to meet customer withdrawal demands as insolvency became imminent. Some top leaders, such as the then CEO, Sam Bankman-Fried (SBF), were blamed for the exchange’s problems based on the misappropriation of funds.
Nevertheless, some quarters still believe there is light at the end of the tunnel for FTX because the new leadership might steer the exchange back to winning ways.
For instance, the regulatory problems facing Binance and Coinbase spearheaded by the United States and Exchange Commission (SEC) might be a stepping stone towards FTX revival plans, according to a crypto enthusiast under the pseudonym Loomdart.
Loomdart has been a leading advocate for the FTX 2.0 movement meant to reboot the bankrupt exchange.
Earlier this year, John Ray, the current FTX CEO, pointed out that the reimbursement process for creditors was likely to happen after two years based on the recovery of nearly $5 billion from the $8 billion misplaced under SBF leadership, The Crypto Basic previously reported.