How Much Is Too Much to Spend on FTX's Bankruptcy?

CoinDesk
CoinDesk

30 Jun 2023 5:16 PM

Are Sam Bankman-Fried’s victims being ripped off a second time?...

  • The legal fees for FTX's bankruptcy process have exceeded $200 million and are expected to increase.
  • One FTX victim is questioning the high costs, which are used to restructure the alleged fraudulent crypto exchange and recover funds for victims.
  • The costs of FTX's bankruptcy are significantly higher than those of other complex bankruptcies.
  • FTX customers are owed $8.7 billion, and the current pace of bankruptcy fees could consume nearly 10% of the recovered funds.
  • Sunil Kuvari, a former FTX customer, argues that the funds are being frivolously spent compared to other bankruptcies.
  • Kuvari is leading a class-action lawsuit against influencers and celebrities who promoted FTX.
  • The bankruptcy examiner recommended some cost reductions but deemed the costs appropriate given the complexity of the situation.
  • If the FTX bankruptcy takes two years, the restructuring team could bill around $800 million, which is 3/4ths of Enron's bankruptcy cost.
  • FTX's remaining and recovered assets are significantly smaller than Enron's, making the high costs relative to its size questionable.

The sentiment of the article is negative, as it highlights the concerns raised by a victim about the high costs of FTX's bankruptcy process.

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You May Ask

What is the current amount of legal fees for FTX's bankruptcy process?How much are FTX customers owed by the exchange?Who is spearheading a class-action lawsuit against influencers and celebrities who promoted FTX?How do FTX's bankruptcy costs compare to those of other complex bankruptcies?What is the size difference between FTX's assets and Enron's assets, and how does it impact the cost of their respective bankruptcies?

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