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FTX paid $12M retainer to a New York law company priorto insolvency filing

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Defunct crypto exchange FTX paid a retainer of $12 million to personalbankruptcy attorneys as security for payment of its costs and expenditures amidst Chapter 11 insolvency procedures, reveals a court filing outdated Dec. 21.

Sullivan & Cromwell LLP (S&C), a law company headquartered in New York City, got $12 million from West Realm Shires Services Inc. on behalf of FTX for legal services. In addition, the filing verified that over the past 90 days, i.e., because Aug. 26, 2022, FTX paid almost $3.5 million to S&C.

Snippet of the court filing exposing FTX’s historic payments to S&C law company. Source: aboutblaw.com

Based on the details supplied, FTX paid at least $15.5 million to get and keep the legal services of S&C. The filing additional exposed that S&C presently holds almost $9 million of the $12 million retainer quantity.

Following the series of payments, FTX submitted for insolvency on Nov. 11, which was accompanied by the CEO Sam Bankman-Fried’s resignation. As a outcome of the subsequent shutdown of the crypto exchange, FTX financiers lost gainaccessto to the funds saved on the exchange.

For some exchanges, restoring financier self-confidence implied sharing proof of the presence of users’ funds through proof-of-reserve (POR) efforts. On the other end of the spectrum, Paxful CEO Ray Youssef, sided with the concept of Bitcoin (BTC) self-custody.

Related: Crypto Twitter puzzled by SBF’s $250M bail and a return to high-end

District Judge Ronnie Abrams withdrew her involvement from the FTX case after exposing that a law company, where her partner works as a partner, had recommended the exchange in 2021.

While clarifying that her otherhalf had no participation in any of these representations, she included:

“Nonetheless, to prevent any possible dispute, or the look of one, the Court thus saves itself from this action.”

Judge Abrams’ withdrawal from the FTX case was intended at removing any dispute of interest in the FTX case.

Credit by : FTX paid $12M retainer to a New York law company priorto insolvency filing.