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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, totaling $118.1 million over three months.

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