TechFlow news — The liquidation costs for the FTX cryptocurrency exchange have surpassed $200 million, according to court filings submitted Tuesday by the court-appointed examiner, describing the process as "exceptionally expensive by any measure." Bankruptcy lawyer Katherine Stadler, appointed in March to oversee expenses, revealed that lawyers and other professionals had already spent nearly 35,000 hours of work by the end of January—equivalent to four full-time years of labor.
"These proceedings will be extraordinarily costly by any standard," Stadler said. She noted that fees have already reached 2% of the estate's assets and 10% of reported cash. Among the 242 lawyers assigned to the case, 46 bill at rates exceeding $2,000 per hour. "What makes these cases unique is that the debtor (and similar fintech companies) operated within a financial system that was essentially unregulated," she said. Citing statements from FTX founder Sam Bankman-Fried, she described the exchange as lacking "even the most basic corporate governance," echoing criticisms previously raised by new CEO John J. Ray III.
"Few companies could accomplish in 90 days what these professionals achieved—transforming a pile of wreckage into a functioning Chapter 11 debtor," Stadler stated. She characterized the post-bankruptcy period as one of "all hands on deck" crisis response. While expressing satisfaction with the overall progress, Stadler called for reductions in certain fees, urging lead counsel Sullivan & Cromwell to cut its $42 million invoice by approximately $650,000 to account for issues such as overstaffing, excessive meetings, and unclear documentation.
