Bitrabo Editorial
FTX exchange filed for bankruptcy seven months ago following a significant bank run, and billions of dollars in user and creditor funds are still trapped on the platform. As the bankruptcy process continues, the exchange appears to be losing even more money, with none of it being returned to the creditors. So, what is FTX spending millions of dollars on?
$120 Million Spent In Two Months
According to a report by The Block, the bankrupt FTX exchange spent a total of $121.8 million in a span of two months, from February 1 to April 30. This money was allocated to various expenditures, including “legal, consulting, and financial services fees and expenses.”
A significant portion of this amount, $37 million, was paid to the Alvarez and Marsel restructuring consultants. It is worth noting that they received over $1.1 million for expenses, which covered lodging, food, and miscellaneous spending. Another $37.6 million went to the law firm Sullivan & Cromwell, which represented the defunct crypto exchange. Additionally, FTI Consulting received $761,991.70 for their work on the “Exchange restart,” fueling speculations about the potential revival of FTX in the future.
Based on the data from this report, it appears that FTX is spending an average of $60 million per month while users and creditors still await access to their funds.
FTT price struggles below $1 | Source: FTTBUSD on TradingView.com
The Infamous FTX Trial
Sam Bankman-Fried, the founder and former CEO of FTX exchange, was arrested in the Bahamas in December last year and extradited to the United States. His trial, scheduled to begin in October, involves multiple charges, including misappropriation of customer and investor funds.
Despite his co-founder Gary Wang and former Alameda Research CEO Caroline Ellison pleading guilty to fraud charges, Sam Bankman-Fried denies any allegations of fraud. He maintains that there was no fraudulent activity but rather mismanagement that led to the exchange’s collapse.
In May, Bankman-Fried’s lawyer filed a motion to dismiss 10 out of the 13 criminal charges initially brought against him. However, a June 14 filing indicates that the charges have been reduced to the original eight, with five charges suspended. Prosecutors confirm that the trial will proceed as scheduled with the remaining charges.