FTX files revised plan to repay creditors as bankruptcy legal fees hit USD 53K/h

Embattled crypto exchange FTX is grappling with soaring legal expenses, burning through $53,000 per hour on bankruptcy-related fees.

As a result, FTX has filed an amended plan to resolve its bankruptcy and repay creditors, but concerns arise regarding the valuation of customer claims and escalating legal costs. This article dissects the latest developments surrounding FTX, shedding light on the financial challenges and legal intricacies the exchange faces.

FTX’s amended plan

FTX has submitted a revised plan to bring an end to its bankruptcy, promising to reimburse billions to creditors. However, the plan lacks clarity on whether the exchange will resume operations.

The proposed payout plan values customer claims for crypto assets at the time of FTX’s collapse in November 2022. Critics argue that this approach, converting crypto holdings into cash, may be contentious. Some suggest it should be considered illegal, emphasizing the need to protect property rights, especially in the digital asset space.

Escalating legal fees and IRS Tax claims

While FTX aims to settle its debts, the exchange is grappling with exorbitant legal fees. Court filings reveal that FTX has spent $53,000 per hour on bankruptcy lawyers and advisers, totalling $118.1 million over three months.

Notably, Casa HODL co-founder Jameson Lopp points out that legal fees and customer shortfalls amount to around $1.4 billion. Additionally, the US Internal Revenue Service (IRS) seeks to collect a substantial $24 billion in unpaid taxes from the bankrupt crypto exchange. These escalating expenses could significantly impact the funds available for creditors, raising concerns within the crypto community.

Crypto enthusiasts express scepticism, labelling FTX’s ongoing legal expenses as the real concern. With daily costs reaching $1.5 million, questions arise about the efficiency and transparency of the bankruptcy proceedings.

Impact on FTX’s native token, FTT

Despite these challenges, FTX’s native token, FTT, has shown resilience in the market, currently trading at $3.64. This comes as a surprise given the broader financial turmoil FTX is navigating.

However, the token remains down 95% from its peak in September 2021, reaching $84.

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