Major law firms have so far billed an enormous sum in the range of $600 million for their roles in some of the biggest cryptocurrency bankruptcy cases in history, possibly due to the complex and novel nature of the legal issues surrounding the industry.
According to Big Law Business, law firms have requested over $567 million in six major crypto bankruptcies to this point. However, the true total probably surpasses $600 million, as some firms have not yet submitted their invoices to the courts for work done in recent months in three of these cases.
These bankruptcy cases and resultant litigation have provided a noticeable boost to the finances of Big Law firms. Data from the Thomson Reuters Institute suggests that bankruptcy practices witnessed a 4.4% year-on-year demand growth in 2023, which was the highest of all practices; litigation came second with a 3.2% growth.
Among those who have benefited the most is Sullivan & Cromwell, which is involved in a solitary crypto case, representing the now-defunct FTX Trading Ltd. From November 2022 to the same month in 2023, this firm has billed more than $153 million, as per court documents.
The FTX case alone has paid $225 million to five major law firms through last November. This is according to the most recent filings of fee requests.
Among the other significant crypto bankruptcy cases are those involving Celsius Network LLC, Genesis Global Holdco LLC, Voyager Digital Holdings Inc., BlockFi Inc., and Core Scientific Inc. Notably, the legal fees from Kirkland & Ellis to represent Celsius, Voyager, and BlockFi totaled $120 million.
Another firm, White & Case, has billed around $65 million. This figure represents the third-largest sum among firms handling crypto bankruptcies.
It must be noted that the considerable fees these firms are accruing from crypto bankruptcy cases are likely not going to subside in the near future. A new Chapter 11 case was filed this week by another crypto entity, Terraform Labs Pte., with Weil Gotshal & Manges leading.