- FTX incurred massive bankruptcy fees, with lawyers charging $53k per hour for 92 days between Aug-Oct, totalling over $100 million.
- Fee examiner criticized overbilling, citing excessive staffing, meetings, and vague time entries by law firms like Sullivan & Cromwell.
- Increased activity from crazes like Ordinals also spiked gas fees on EVM chains and Bitcoin, showing how demand strains networks.
The implosion of FTX has sent shockwaves through the crypto industry. As the dust settles, the enormous bankruptcy fees racked up so far reveal the astronomical costs of FTX’s failure.
FTX’s Bankruptcy Lawyers Are Burning Through $53K Per Hour
In the three months ending Oct 31, the defunct crypto exchange FTX burned through approximately $53,000 every hour on bankruptcy lawyers and advisers. Court filings from Dec 5 to Dec 16 show the bankruptcy lawyers charged at least $118.1 million between Aug 1 and Oct 31. Over the 92 days, this amounts to $13 million per day, or $53,300 per hour.
The largest bill came from management consulting firm Alvarez & Marsal, which charged $35.8 million for its services for the three months. Coming in second place was global law firm Sullivan & Cromwell, which charged $31.8 million for its services. Their hourly rate averaged $1,230 per hour.
Criticisms of Overbilling
An earlier report filed on Dec 5 by the court-appointed fee examiner Katherine Stadler identified significant overbilling issues. Stadler called out “apparently top-heavy staffing,” “apparently excessive meeting attendance,” and vague time entries from firms like Sullivan & Cromwell and Alvarez & Marsal between May 1 and June 31.
Ordinals Craze Also Causes Fees To Spike on EVM Chains
The inscriptions craze has also caused gas fees to spike on Ethereum Virtual Machine (EVM) chains. On Dec 16, gas spent on inscriptions surged to a record $8.3 million across EVM chains like Avalanche, Arbitrum, and BNB Chain. Bitcoin network fees have also spiked from Ordinals activity.
Conclusion
As crypto continues to pick up the pieces from FTX’s collapse, the enormous legal bills reveal just how costly the fallout has become. The fees also show how increased activity like the Ordinals craze can strain networks and send transaction costs soaring.
