Silicon Valley law firm Fenwick & West — which served as FTX's lead outside counsel before the crypto exchange's collapse — has reached a settlement with FTX users in a federal lawsuit alleging the firm helped facilitate Sam Bankman-Fried's $8 billion fraud. The settlement terms will be presented for court approval on 27 February in a Florida federal court, with financial details undisclosed.
The lawsuit, originally filed in 2023 and amended in August 2024, alleged that Fenwick played a key and crucial role in the conduct that enabled the FTX fraud — claiming the firm designed and approved corporate structures that allowed misconduct to continue undetected, helped FTX avoid certain money transmitter registration requirements, and had visibility into the commingling of customer funds and the blurred operational boundaries between FTX and its sister trading firm Alameda Research. Lead plaintiff attorneys David Boies of Boies Schiller Flexner and Adam Moskowitz of The Moskowitz Law Firm said they were pleased to reach a settlement. Fenwick has consistently denied the allegations, arguing it provided routine, lawful legal services, never represented Bankman-Fried or other FTX insiders, and had no knowledge of the fraud — however, the court rejected Fenwick's motion to dismiss in November, allowing the amended complaint to proceed.
The settlement forms part of a broader wave of litigation following FTX's 2022 collapse — an earlier lawsuit by users against Sullivan & Cromwell, FTX's primary outside counsel, was voluntarily dismissed eight months after filing, with plaintiffs citing insufficient evidence.
Sources:
- https://www.law360.com/pulse/florida-pulse/articles/2436975/fenwick-reaches-deal-in-ftx-crypto-scam-suit
- https://www.reuters.com/legal/government/former-ftx-law-firm-fenwick-settle-lawsuit-over-work-crypto-exchange-2026-02-02/
- https://finance.yahoo.com/news/ftx-users-reach-proposed-settlement-081014604.html
