FTX Bankruptcy: Behind the Astronomical Legal Costs

As the global exchange FTX faces its demise, lawyers and professionals are racking up an astonishing $1.5 million per day in legal bills. The skyrocketing costs have become a point of contention, with creditors expressing their concern during a recent bankruptcy hearing.

Kris Hansen, a lawyer representing the creditors' committee, shocked the courtroom when he revealed, "They've now moved to a pace of almost $50 million a month in fees, with literally hundreds of lawyers, financial advisors, and bankers working on them practically full time. Every dollar spent in the case is essentially a dollar that creditors don't receive."

A report filed two months ago found that the first seven months of the case accrued a whopping $200 million in fees. While being labeled as "remarkable," the report commended the professionals involved for their tireless efforts to recover creditors' money from the "smoldering heap of wreckage."

Complicating matters further, the complex bankruptcy proceedings require negotiation with other fallen giants in the crypto industry. For example, FTX's Alameda Research recently struck a deal with Genesis that could entitle them to a $175 million claim in Genesis' bankruptcy. Additionally, FTX's financial records have been a nightmare since the beginning, filled with lies and obfuscation from the previous management, as confessed by FTX's CEO, John J. Ray III.

Despite claims of working "tirelessly" and keeping the process on track, the representatives of the bankrupt exchange are facing criticism. Hansen argues that the process to potentially reignite an FTX 2.0 is dragging and lacks transparency. He also believes that the debtors' group should be doing more to maximize returns on the company's cash and crypto assets during the ongoing case.

In this high-stakes situation, every day counts for both the creditors and FTX's future.

Read More: FTX Fires Back at Creditors 'Willing to Gamble Estate Assets on Higher Returns'