In the complex realm of cryptocurrency, major law firms have reaped substantial financial benefits from handling significant bankruptcy cases. Accumulating over $700 million in fees, these firms have found a goldmine in the high-profile collapses of various crypto enterprises. Notable bankruptcies in recent times include entities such as Sam Bankman-Fried’s FTX Trading Ltd, Genesis Global Capital, BlockFi, Celsius, and Voyager Digital. Two particular law firms have emerged as dominant players in this field: Sullivan & Cromwell and Kirkland & Ellis.
Sullivan & Cromwell stands to gain the most from the ongoing bankruptcy case of FTX Trading Ltd, the cryptocurrency exchange founded by Sam Bankman-Fried. FTX, based in the Bahamas, filed for bankruptcy in November 2022 following a massive customer withdrawal that uncovered an $8 billion deficit. Reports indicate that the bankruptcy proceedings for FTX have generated over $500 million in fees for its legal and advisory teams, with total costs continuing to climb. Administrators of the bankruptcy process have requested a staggering $700 million in fees and expenses, some of which have been reduced by 20%, while others await approval.
Within the FTX case, Sullivan & Cromwell, acting as the special counsel, has been approved for $254 million in fees, despite their original billing amounting to $360 million. Financial advisory firm Alvarez and Marsel have secured $133 million in approved fees, trailing closely behind. Other firms and advisers, including AlixPartners, Quinn Emanuel Urquhart and Sullivan, Perella Weinberg Partners, and Landis Rath and Cobb, together have charged $57 million. FTX’s CEO, John Ray III, has billed $5.6 million, with an hourly rate of $1,300, while RLKS Executive Solutions, the estate’s chief officers, have invoiced $26 million. The Official Committee of Unsecured Creditors has racked up $81 million in fees and $1.5 million in expenses, with the Ad Hoc Committee requesting under $5 million in fees.
Kirkland & Ellis, Has been involved in three major bankruptcy cases—Celsius, Voyager Digital, and BlockFi—amassing over $120 million in legal fees. The firm filed its final fee application for these cases in January, seeking a substantial $76 million for the Celsius case alone. The Voyager and BlockFi cases brought in $27 million and $16 million respectively, illustrating the overwhelming dominance of the Celsius case in their total earnings from these bankruptcies.
The collapse of Celsius in July 2022 followed the downfall of TerraUSD and its associated digital currency, Luna. Around the same time, Voyager Digital went under, compounded by the bankruptcy of hedge fund Three Arrows Capital. BlockFi, heavily entangled with FTX through a $400 million credit line, also declared bankruptcy in November 2022 after FTX’s own bankruptcy filing.
The legal landscape saw a notable trend in 2023, particularly in bankruptcy practices. According to data from the Thomson Reuters Institute, there was a 4.4% annual growth in demand for bankruptcy services, marking the highest increase among all legal practices. Litigation followed with a 3.2% growth, indicating a rising tide in legal demands amid financial turmoil within the cryptocurrency sector.
This surge in demand for bankruptcy expertise showcases not only the volatility of the cryptocurrency market but also the crucial role played by legal professionals in navigating these turbulent waters. Major law firms have not only capitalized on these opportunities but have also become indispensable in the resolution of complex financial crises within the crypto industry.
As the digital currency landscape continues to evolve, it remains to be seen how future bankruptcies will shape the legal and financial sectors. What is evident is the continuing lucrative potential for those equipped to manage the fallout of these high-stakes collapses.
Absolutely fascinating read! Legal firms undeniably play a crucial role in untangling the crypto mess.
When law firms make more off a bankruptcy than the creditors get back, you know the system is broken.
Imagine billing $254 million! These law firms are surely making the most of a struggling crypto economy.
Wow, this is eye-opening! 💸 Who knew the cryptocurrency market would be such a goldmine for law firms!” 🔍✨
Incredible how much money is flowing into legal fees for these crypto bankruptcies. 😲💼 Sullivan & Cromwell and Kirkland & Ellis are definitely the top dogs in this game!” 🐾
It’s interesting to see how the crypto market’s volatility is creating such lucrative opportunities for legal firms.
It’s laughable how much these firms charge. Are they seriously worth that kind of money?
million in fees??? Meanwhile, everyday people are losing their savings in these crypto collapses. Ridiculous!
Who would have thought cryptocurrency bankruptcies would be so profitable for legal firms? Truly a goldmine! 💰✨
These figures are wild! Sullivan & Cromwell’s gain from FTX alone shows how essential legal navigation is in the crypto domain.
Just another example of how the rich get richer while everyone else gets screwed.
The legal drama surrounding these crypto collapses is gripping. Kudos to the law firms for managing such complex cases effectively!
The crypto market is a mess, and these law firms are making it worse by profiting off the chaos.
How is it that the real culprits walk away and the lawyers rack up millions? Something seriously wrong here.
Remarkable read! The pivotal role of legal experts in the crypto ecosystem is crystal clear now.
These law firms make a fortune off other people’s losses. Where’s the justice in that?
Sullivan & Cromwell and Kirkland & Ellis are proving their dominance in this sector. Amazing work! 🏆💼
It’s insane how much these law firms profit while investors and customers are left in shambles. The system is so rigged!
Sullivan & Cromwell and Kirkland & Ellis are cashing in big time, while the little guy suffers. Sickening.
Wow, these law firms are amassing fortunes from crypto collapses! Enormous gains for substantial work.
Shows just how pivotal legal firms are in the financial world, especially with such turbulent market phases.
It’s astonishing how much these law firms are making from these cases! $700 million in fees is no joke.
The rapid demand increase for bankruptcy services speaks volumes about the current state of the crypto market. Legal firms are definitely thriving!
The expertise of Sullivan & Cromwell and Kirkland & Ellis can’t be overstated. They are truly navigating uncharted waters!
The legal intricacies involved in these cases are mind-blowing. High praise for the law firms steering through these crises. 🌪️⚖️
million for one law firm in the FTX case? Seems like they’re the real winners here, not the victims of the bankruptcy.
Impressive how law firms are navigating this complex terrain. Hats off to them for handling such immense responsibilities!
This feels like legalized robbery. These fees are insanely high!
Why are we rewarding incompetence and fraud with exorbitant legal fees? This needs to stop!
Sullivan & Cromwell and Kirkland & Ellis have truly shown their prowess in these challenging times. Legal expertise at its finest! 💡💼
Cryptocurrency volatility is difficult for investors but highly lucrative for law firms, apparently! Well played, Sullivan & Cromwell and Kirkland & Ellis!
There’s something seriously wrong when law firms cash in on people’s financial disasters. This whole thing is a joke.
These legal fees are staggering! It really puts into perspective the complexity and scale of these cases. 💰💼
The amount of money involved here is mind-boggling! It’s clear legal expertise is crucial in managing these major financial collapses.
The growing demand for bankruptcy services amidst crypto turmoil is quite revealing. Kudos to the legal teams managing these crises!
The sheer amount of money in legal fees is astonishing! Clearly, law firms are indispensable in these crypto bankruptcy cases.
Such fascinating insight into the high-stakes world of crypto bankruptcies! Sullivan & Cromwell and Kirkland & Ellis are truly capitalizing on their expertise. 💼💡
People lost their life savings, and all these law firms see are dollar signs. Disgusting.