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Monday, February 6, 2023

FTX Had Set Up A New York Firm As Retainer For $12 Million

FTX, the bankrupt crypto exchange, had paid a sum of $12 million to bankruptcy attorneys as a security deposit for the payments of multiple expenses and assorted fees. This took place amid the bankruptcy proceedings of Chapter 12 which shows a court filing that has been dated the 21st of December. A law firm that has its headquarters in New York, Sullivan & Cromwell LLP, received around $12 million from West Realm Shires Service on behalf of the crypto exchange.

The filing also confirmed that over the last 90 days, the exchange had paid $3.5 million to the law firm. Based on this report, one can assume that FTX paid around $15.5 million to make sure they had this law firm on a Retainer. The filing also revealed that the law firm had around $9 million currently of the $12 million Retainer value. 

FTX Had New York Law Firm As A Retainer

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After FTX kept paying the law firm to keep them as Retainer, the exchange itself filed for bankruptcy on the 11th of November, which was accompanied by the resignation of Sam Bankman-Fried, the former CEO of the exchange. Due to the exchange completely shutting down, all the investors in the company were unable to access the funds that had been stored on the exchange. 

The case that was levied against FTX also saw a major twist when Judge Ronnie Abrams decided to recuse herself from the legal proceedings. She had to recuse herself because her husband was under gainful employment by a law firm that had advised the crypto exchange in 2021. Despite clarifying that her husband had no dealings with the entire crypto exchange, the Judge stated that it would be better for both sides that she recused herself, in order to not create a conflict of interest in court.

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