Thousands of investors got fleeced. Others bet wrong and lost their shirts. But one group involved in the cryptocurrency business is cashing in: bankruptcy attorneys.
As former high-flying crypto companies have crashed, lawyers, as well as accountants, consultants, and financial analysts, are generating massive fees for their work picking apart the remains of the bankrupt companies and dealing with the many claims against crypto operators.
Billings from law firms and other professional service companies total more than $700 million dollars for work associated with five major crypto bankruptcies, according to court filings analyzed by The New York Times. The bankruptcy of FTX, formerly a leading cryptocurrency exchange, has generated the greatest bonanza for professional service firms, $327 million dollars thus far. Fees associated with the Chapter 11 bankruptcy filing of Celsius Network, a cryptocurrency lending company, total $186 million. The Times also studied fees in the bankruptcies of Voyager Digital, BlockFi, and Genesis Global. In total, more than 50 professional service firms have charged the five bankrupt companies $714 million.
Law firm Sullivan & Cromwell, which manages FTX’s bankruptcy, has billed more than $110 million in legal fees, while Kirkland & Ellis has charged $101 million for work on three of the bankruptcies.
Because the bankruptcies are still being sorted out, the law firm and consultant fees could go even higher.Speculators around the globe jumped into the volatile world of cryptocurrencies hoping to make a killing. Instead, leading crypto companies crumbled amid allegations of fraud and mismanagement, costing their investors billions of dollars.
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