The defunct cryptocurrency exchange FTX paid a $12 million advance to bankruptcy attorneys as a guarantee for payment of their Fees and Expenses Amid Chapter 11 Bankruptcy Proceedingsshows a court filing dated December 21.
Sullivan & Cromwell LLP (S&C), a New York City-based law firm, received $12 million from West Realm Shires Services Inc. on behalf of FTX for legal services. furthermore, the presentation confirmed that during the last 90 days, that is, since August 26, 2022, FTX paid almost $3.5 million to S&C.
According to the information provided, FTX paid at least $15.5 million to leverage and retain S&C's legal services. The filing further disclosed that S&C currently owns nearly $9 million of the $12 million retained amount.
Following the series of payments, FTX filed for bankruptcy on November 11, which was accompanied by the resignation of CEO Sam Bankman-Fried. As a result of the subsequent shutdown of the crypto exchange, FTX investors lost access to funds stored on the exchange.
For some exchanges, regaining investor confidence meant sharing evidence of the existence of user funds through proof-of-reserve (POR) initiatives. At the other end of the spectrum, Paxful CEO Ray Youssef Sided with the Bitcoin Idea (BTC) self-custody.
Related: Crypto Twitter confused by SBF's $250 million bail and return to luxury
district judge Ronnie Abrams withdrew his involvement in the FTX case after revealing that a law firm, where her husband works as a partner, had advised the exchange in 2021.
Clarifying that her husband did not participate in any of these performances, she added:
"However, to avoid any possible conflict, or the appearance of one, the Court releases itself from the present action."
Judge Abrams' withdrawal from the FTX case was intended to eradicate any conflict of interest in the FTX case.
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