FTX paid $12M retainer to a New York law firm before bankruptcy filing

Decommissioned cryptocurrency exchange FTX paid bankruptcy attorneys $12 million in retainage money as security for payment of fees and costs during its Chapter 11 bankruptcy proceedings, court filings dated Dec. 21 show. I’m here.

Sullivan & Cromwell LLP (S&C), a New York City-based law firm, received $12 million in legal services from West Realm Shires Services Inc. on behalf of FTX.In addition filing Over the past 90 days, i.e. since August 26, 2022, FTX has confirmed that it has paid S&C approximately $3.5 million.

Excerpts from court filings revealing FTX’s past payments to S&C Law Firm. Source: www.aboutblaw.com

Based on the information provided, FTX paid at least $15.5 million to engage and maintain S&C’s legal services. The filing further revealed that S&C currently holds approximately $9 million of its $12 million reserves.

After a series of payments, FTX filed for bankruptcy on Nov. 11 and CEO Sam Bankman-Fried stepped down. As a result of the subsequent closure of the cryptocurrency exchange, FTX investors no longer have access to funds stored on the exchange.

For some exchanges, regaining investor confidence meant sharing proof of the existence of users’ funds through their Proof of Reserve (POR) initiative. Meanwhile, his CEO of Paxful, Ray Youssef, has embraced the idea of ​​Bitcoin (BTC) self-management.

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District Court Judge Ronnie Abrams has withdrawn his participation in the FTX lawsuit after revealing that the law firm with which her husband is a partner advised the exchange in 2021.

While clarifying that her husband was not involved in any of these representations, she added:

“Nevertheless, in order to avoid the possibility of disputes, or the appearance of such, the Court hereby saves itself from this action.”

Judge Abrams’ withdrawal from the FTX case was intended to eradicate a conflict of interest in the FTX case.