2022 was the year of bankruptcies across a variety of crypto platforms. Earlier this year, major crypto lending platforms such as Celsius and Voyager Digital filed for bankruptcy. Also, the major crypto hedge fund Three Arrows Capital (3AC) ran into financial trouble after the crash of the Terra ecosystem (LUNA).
After a few months of calm, a new storm had started due to the collapse of crypto exchange FTX. What exactly the infamous domino effect will entail remains to be seen, but crypto bank BlockFi was the first big name to go after FTX in filing for bankruptcy.
Bankruptcy crypto companies
The demise of all these big names in the crypto industry is very painful for everyone involved. However, there is one big winner in this mess and that is the law firms that specialize in bankruptcy.
Law firm Kirkland & Ellis currently represents both Celsius, BlockFi and Voyager Digital in their so-called chapter 11 bankruptcy. Such a chapter 11 means that the company can continue as long as it has the money to do so. The company is protected from its creditors for a certain period of time and is given time to complete a reorganization in order to be able to pay its debts afterwards.
According to court filings, Kirkland & Ellis charges nearly $2,000 an hour for its services. The law firm has earned an average of $3.3 million in monthly legal fees from each of the aforementioned companies. Kirkland & Ellis even has in the month of August $5.6 million in legal fees earned from Celsius.
The highest fees to date have gone to Latham & Watkins, an American multinational law firm, for its services to Celsius and 3AC. The company has been paid $2,075 per hour, according to court documents.
Crypto lending platform BlockFi
Earlier you could read in the Bitcoin news that Blockfi is the most recent party in the world of cryptocurrencies that has filed for bankruptcy. The collapse of BlockFi is a direct result of FTX that went under earlier. BlockFi has over 100,000 creditors of which FTX.US is one with $275 million in claims. Next comes the Securities and Exchange Commission (SEC) with $30 million in claims.