Crypto Bankruptcies: The Astronomical Costs of Fallen Giants FTX, Celsius Network, Voyager Digital, BlockFi, and Genesis
Crypto Bankruptcies Yield Millions in Fees
According to an analysis by The New York Times, lawyers, accountants, consultants, analysts, and other professionals have raked in at least $700 million from the bankruptcies of crypto companies over the period between July 5, 2022, and July 31, 2023.
The analysis reveals that legal experts involved in the case surrounding FTX, the crypto exchange that collapsed in November, emerged as the biggest winners, billing a total of $326 million. The law firm Sullivan & Cromwell, which manages the FTX bankruptcy, reportedly charged more than $110 million in legal fees, in addition to $500,000 in expenses.
Furthermore, analysts from The New York Times found that Kirkland & Ellis, the law firm handling the bankruptcies of Celsius, Voyager, and Genesis, billed a total of $101 million for its work, with $2.5 million in expenses.
Alvarez & Marsal, a global advisory and consultancy firm, was said to have charged over $125 million for its contributions to FTX, Celsius, and Genesis.
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Recent reports have also revealed that FTX pays a staggering $50 million in fees to lawyers and other professionals every month.
Creditors Left in the Lurch: Still No Access to Their BTC
The creditors of these fallen crypto companies are understandably the ones suffering from the exorbitant costs associated with the bankruptcy process. Many investors have learned their lesson from last year when it comes to custody of their crypto assets. If you do not possess the private keys yourself, you are not the true owner of the coins.
Most victims are still waiting to receive a portion of their crypto holdings. By storing your Bitcoin (BTC) and other cryptocurrencies in your own wallet, you can avoid such unfortunate situations.
Remember: “Not your keys, not your coins.”
The bankruptcy of major crypto companies like FTX, Celsius Network, Voyager Digital, BlockFi, and Genesis has left a trail of massive costs. Legal fees, consultant charges, and other professional expenses have amounted to millions of dollars. While professionals involved in the bankruptcy proceedings profit immensely, creditors continue to suffer, unable to access their digital assets. It is crucial for investors to understand the importance of self-custody by securely storing their cryptocurrencies in personal wallets.