FTX bankruptcy costs surpass all other crypto collapses combined
FTX bankruptcy costs
FTX’s bankruptcy has become the most expensive in the history of the cryptocurrency industry, with legal and financial costs nearing $1 billion.
Court filings reveal that nearly $948 million has already been paid to law firms and financial advisers, surpassing the combined $502 million cost of the Celsius, Genesis, BlockFi, and Voyager Digital bankruptcies, according to Crypto News.
Legal fees soar as asset recovery efforts continue
The staggering fees stem from efforts to recover billions in assets lost in FTX’s collapse, a process complicated by the company’s intricate financial structure.
The lead law firm, Sullivan & Cromwell, has collected over $248 million, while financial consultancy Alvarez & Marsal has earned approximately $306 million. A firm overseeing customer claims has charged around $110 million.
Despite these costs, most FTX customers are expected to recover 118% of their claims—a rare outcome in major bankruptcy proceedings. The firm began initial distributions to creditors last week, while legal teams continue to locate additional assets.
FTX’s bankruptcy remains entangled in litigation, including a $1.8 billion lawsuit against Binance. However, its expenses, though substantial, are still well below the record $6 billion spent on the Lehman Brothers bankruptcy in 2008.
With legal battles ongoing and asset recoveries underway, the FTX case underscores both the financial complexities of cryptocurrency failures and the immense costs of untangling them.
Earlier last year, FTX filed a lawsuit against Binance and its co-founder Changpeng Zhao, demanding the return of $1.76 billion, which FTX claims was fraudulently transferred by Binance.
