Silicon Valley Law Firm Fenwick & West Settles FTX Fraud Claims for $54 Million

Lawfirm Cuts $54M Deal With FTX Customers After Lead Counsel Allegations

The projected settlement was filed this week successful the Southern District of Florida and requires last support from U.S. District Judge K. Michael Moore. The statement does not admit wrongdoing by the firm.

Plaintiffs alleged Fenwick went good beyond modular ineligible advice, claiming the steadfast helped trade strategies that enabled FTX to commingle lawsuit funds with those of Alameda Research, the affiliated trading steadfast controlled by FTX laminitis Sam Bankman-Fried. They described the firm’s alleged relation arsenic creating “shadowy entities” and ineligible structures that obscured the misuse of lawsuit assets.

Fenwick wholeheardily denied the allegations. The steadfast said it was not alert of immoderate fraud astatine FTX, stands by its ineligible work, and agreed to settee successful bid to determination guardant with its business.

Plaintiffs’ question for preliminary support of the 2nd tranche of settlements, provisional certification of the projected colony class, and support of the projected schedule. Source: In Re: FTX Cryptocurrency Exchange Collapse Litigation (1:23-md-03076).

The suit is portion of the broader multidistrict litigation known arsenic In Re: FTX Cryptocurrency Exchange Collapse Litigation. Attorney David Boies represented plaintiffs successful the case. Fenwick initially sought dismissal earlier engaging successful colony talks.

Under the terms, the $54 cardinal volition beryllium deposited into an escrow relationship wrong 120 days of archetypal tribunal approval. Plaintiffs’ attorneys said the woody was tenable fixed the complexity and outgo of continued litigation.

FTX collapsed successful November 2022, triggering bankruptcy and exposing a fraud that wiped retired billions successful lawsuit funds. Bankman-Fried was sentenced successful 2024 to 25 years successful situation for stealing astir $8 cardinal from customers.

The Fenwick statement is portion of a 2nd question of class-action settlements tied to the FTX collapse. Earlier deals progressive FTX executives Caroline Ellison, Nishad Singh, and Gary Wang, arsenic good arsenic personage promoters. Auditor Prager Metis separately agreed to wage astir $11.75 cardinal successful related resolutions, pushing combined nonrecreational services payouts to astir $66 million.

For FTX victims, the colony adds to a watercourse of partial recoveries that stay tiny comparative to full losses. Professional services firms associated with the now-defunct speech person faced increasing scrutiny since the illness implicit however overmuch they knew and what role, if any, their enactment played successful enabling the fraud.

The Fenwick woody does not resoluteness each claims against the firm. A abstracted suit filed successful May 2026 successful a Washington, D.C. national tribunal by astir 20 idiosyncratic FTX victims from aggregate countries remains active. That lawsuit names Fenwick, on with respective existent and erstwhile partners, and seeks compensatory damages, instrumentality of ineligible fees paid by FTX, and punitive damages.

The D.C. suit makes akin allegations, arguing the firm’s ineligible enactment enabled the misappropriation of lawsuit funds and helped FTX debar regulatory oversight. Final tribunal support of the $54 cardinal class-action colony is inactive pending. Until Judge Moore signs off, nary funds volition beryllium distributed to the people of erstwhile FTX customers.