Law firms profit $751 million from crypto bankruptcies

Crypto bankruptcies result in substantial losses for investors but also generate significant fees for lawyers handling high-profile cases. Law firms have received fees totaling $751 million for working on seven 2022 Chapter 11 crypto bankruptcies, with firms like Sullivan & Cromwell, Kirkland and Ellis, White & Case, and Cleary Gottlieb earning the most.

These four companies earned $484 million collectively for their work on crypto bankruptcies, representing 64% of all costs in Chapter 11 proceedings. Sullivan & Cromwell had the highest profit of $215 million, followed by Kirkland & Ellis with $120 million, White & Case with $75 million, and Cleary Gottlieb with nearly $73 million.

There are still ongoing bankruptcy cases, including the FTX and Terraform Labs cases resulting from the fall of TerraUSD stablecoin. FTX’s confirmation hearing is set for October, while Terraform Labs’ reorganization hearing is scheduled for September 19. Genesis has completed its restructuring plan and paid $4 billion in damages to affected parties on August 2.

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