High-profile bankruptcy cases have turned into a lucrative goldmine for major law firms Sullivan & Cromwell and Kirkland & Ellis, which have amassed over $700 million in fees from significant cryptocurrency bankruptcy cases.

Several major bankruptcy cases have surfaced in recent years, including those of Sam Bankman-Fried’s crypto exchange FTX Trading Ltd, Genesis Global Capital, BlockFi, Celsius, and Voyager Digital.

Sullivan & Cromwell, currently managing the case involving FTX Trading Ltd, is set to be the biggest beneficiary. The Bahamas-based cryptocurrency exchange filed for bankruptcy in November 2022 after a surge in customer withdrawals revealed an $8 billion deficit in FTX’s accounts. Reports indicate that FTX’s bankruptcy has yielded over $500 million in fees for its lawyers and advisers, with the total costs soaring. Administrators have requested $700 million in fees and expenses, with some requests reduced by 20%, while others await approval.

Court filings reveal that Sullivan & Cromwell has received approval for $254 million in fees despite billing $360 million. Financial advisers Alvarez & Marsel follow with $133 million in approved fees. Other firms and advisers, including AlixPartners, Quinn Emanuel Urquhart & Sullivan, Perella Weinberg Partners, and Landis Rath & Cobb, have collectively charged $57 million. FTX CEO John Ray III has billed $5.6 million hourly at $1,300, while RLKS Executive Solutions, the estate’s chief officers, has invoiced $26 million. The Official Committee of Unsecured Creditors has incurred $81 million in fees and $1.5 million in expenses, while the Ad Hoc Committee has requested less than $5 million in fees.

Kirkland & Ellis has likely earned over $120 million for its role as lead counsel for three major crypto exchanges that filed for Chapter 11 during the peak of cryptocurrency losses in 2022. In January, Kirkland & Ellis filed its final fee application for three bankruptcy cases, seeking $76 million for the Celsius case, significantly higher than the $27 million and $16 million earned from the Voyager and BlockFi cases, respectively. The firm’s total fees for the three cases amount to $120 million, with the Celsius case accounting for the majority.

Celsius filed for bankruptcy in July 2022 after the collapse of TerraUSD and its digital currency, Luna. Voyager Digital filed for bankruptcy in July 2022 after the hedge fund Three Arrows Capital filed for bankruptcy. BlockFi filed for bankruptcy in November 2022 after FTX, from which it had a $400 million credit line, also filed for bankruptcy.

According to Thomson Reuters Institute data, bankruptcy practices experienced a 4.4% year-over-year demand growth in 2023, the highest among all practices, followed by litigation with a 3.2% growth.