Recent documents reveal FTX’s millionaire spending on consultancies.
From February 1 to April 30, 2023, bankrupt cryptocurrency exchange FTX spent $121.8 million on financial and consulting services. Representatives from the law firm Sullivan & Cromwell received the highest compensation.
The attorneys at Sullivan & Cromwell billed $37.6 million for their services, representing 30.9% of all fees and expenses. Alvarez and Marsel’s restructuring consultants billed $37 million, of which expenses amounted to more than $1.1 million, including $51,225 for food, $149,155 for lodging and $1,995 for other items. Investment banking firm Jefferies submitted the lowest bill, accounting for 0.6% of all fees and expenses.
“Claims and compensation from restructuring consultants take precedence over unsecured claims, which include client deposits,” said Greg Lim of The Block Research.
According to the documents, FTI Consulting spent around 686.8 hours and billed $761,997 for working in the “Relaunch of the Stock Market” direction. And according to April documentation filed on the website of consulting firm Kroll, the exchange’s new CEO, John J. Ray, submitted an invoice for work done on “2.0”-related items, which presumably means FTX 2.0. One column says “next steps review and feedback on FTX relaunch”.
On the other hand, former FTX partner Anthony Scaramucci, who runs investment firm SkyBridge Capital, doubts the possibility of relaunching the stock market due to the bear market. According to him, at the moment the platforms are operating at a loss and burning the previously raised capital.
