According to Martin Folb, a cryptocurrency influencer who goes by as MartyParty on X (formerly Twitter), the managers of the FTX estate need to provide more clarity on their handling of the bankruptcy process. Folb believes more funds are circulating within the FTX system than the current managers are paying to affected victims.
So if @FTX_Official current management and bankcrupcy people are paying creditors $18 a $SOL but they sold it for $50-100 where does the difference go? Where is that money? I think its billions of dollars?👀
The lawyers are making $40m a day in fees. Are they paying themselves…
— MartyParty (@martypartymusic) February 5, 2024
In a recent post on X, Folb noted that FTX’s current managers and bankruptcy handlers are paying creditors $18 per SOL. However, they sold their SOL tokens for between $50 and $100. Folb thinks that the volume of SOL tokens sold by FTX reflects an inflow of several billion dollars. Hence, he asked what was happening to the difference.
Folb questions the earnings of the lawyers handling the FTX bankruptcy case. According to the influencer, FTX lawyers pay themselves $40 million daily in fees, an amount he considers outrageous and unacceptable.
Folb highlighted a March 2023 report by The Kobeissi Letter, an X account that comments on the global capital markets. The report noted that FTX lawyers charged $38 million for legal fees in the month of January 2023, rather less than $40 million per day claimed by Folb. It also highlighted that the amount was split across over 200 lawyers working on the FTX case.
The Kobeissi Letter extended its report beyond FTX, noting that outrageous legal fees are not peculiar to FTX. The report listed other notable crypto-related fines and lawsuits in 2023 alone, including Coinbase, Binance, Silvergate, Terraform, and many more.
The report also noted that the peculiarity of legal fees results from the nature of the lawsuits in the major crypto cases. The Kobeissi Letter’s report highlighted that roughly 44% of crypto lawsuits are class action suits while 56% are non-class action.
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