After reviewing several law firms, FTX’s Unsecured Creditors Committee selected legal counsel.
The nine-member committee representing unsecured creditors at disgraced crypto exchange FTX chose legal counsel after objections from numerous law firms, The Wall Street Journal reported on Dec. 21.
Global law firm Paul Hastings LLP has been retained to represent the interests of unsecured creditors in the bankruptcy case, including millions of FTX clients. A selection process for financial advisers is also underway, according to WSJ sources.
FTX’s Committee of Creditors was appointed by the United States Department of Justice on December 16. Its members include cryptocurrency companies such as Pulsar Global, Coincident Capital International, and Wintermute Asia.
FTX will be responsible for paying attorney fees related to bankruptcy proceedings affecting clients.
Founded in 1951 in the United States, Paul Hastings has offices in Asia, Europe and Latin America with more than 450 corporate lawyers, according to its website.
FTX’s new management is expected to appear in court in January, the WSJ noted. Some of its businesses are already on sale, including Embed Financial Technologies, LedgerX, FTX Japan, and FTX Europe.
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Related: Third Party Could Return FTX Funds Directly to Client: Law Firm
Unsecured clients appealed to the law firm the same day that FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to federal fraud charges. In addition, the United States Securities and Exchange Commission, Ellison and Wang, have been indicted for their role in a “multi-year plan to defraud investors in FTX.” The SEC is also investigating other violations of securities law and other individuals and entities implicated in the wrongdoing.
The exchange’s former CEO, Sam Bankman-Fried, was also detained by the Federal Bureau of Investigation as part of a rapid development after FTX collapsed nearly 40 days ago. As Cointelegraph reported, Bankman-Fried was given $250 million bail.
Bankman-Fried faces charges of wire fraud, conspiracy to launder money, conspiracy to commit wire fraud, commodities and securities fraud and campaign finance violations. If convicted on all counts, he faces 115 years in prison.
The FTX founder faces new charges from the Commodity Futures Trading Commission and the Securities and Exchange Commission for allegedly violating commodity laws and defrauding investors.
