FTX paid $12M retainer to a New York regulation agency earlier than chapter submitting

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Defunct crypto alternate FTX paid a retainer of $12 million to chapter legal professionals as safety for cost of its fees and expenses amid Chapter 11 bankruptcy proceedings, exhibits a court docket submitting dated Dec. 21.

Sullivan & Cromwell LLP (S&C), a regulation agency headquartered in New York Metropolis, acquired $12 million from West Realm Shires Companies Inc. on behalf of FTX for authorized companies. As well as, the filing confirmed that over the previous 90 days, i.e., since Aug. 26, 2022, FTX paid practically $3.5 million to S&C.

Snippet of the court docket submitting revealing FTX’s historic funds to S&C regulation agency. Supply: aboutblaw.com

Based mostly on the data offered, FTX paid at the very least $15.5 million to avail and retain the authorized companies of S&C. The submitting additional revealed that S&C at the moment holds practically $9 million of the $12 million retainer quantity.

Following the collection of funds, FTX filed for chapter on Nov. 11, which was accompanied by the CEO Sam Bankman-Fried’s resignation. On account of the following shutdown of the crypto alternate, FTX buyers misplaced entry to the funds saved on the alternate.

For some exchanges, regaining investor confidence meant sharing proof of the existence of customers’ funds by way of proof-of-reserve (POR) initiatives. On the opposite finish of the spectrum, Paxful CEO Ray Youssef, sided with the idea of Bitcoin (BTC) self-custody.

Associated: Crypto Twitter confused by SBF’s $250M bail and a return to luxury

District Decide Ronnie Abrams withdrew her participation from the FTX case after revealing {that a} regulation agency, the place her husband works as a associate, had suggested the alternate in 2021.

Whereas clarifying that her husband had no involvement in any of those representations, she added:

“Nonetheless, to keep away from any doable battle, or the looks of 1, the Courtroom hereby rescues itself from this motion.”

Decide Abrams’ withdrawal from the FTX case was geared toward eradicating any battle of curiosity within the FTX case.