Fenwick & West Agrees To Pay $54 Million To Settle FTX Customer Lawsuit

Fenwick & West LLP, the Silicon Valley law firm that served as lead outside counsel for collapsedcryptoexchange FTX, agreed to pay $54 million to settle a federal class-action lawsuit filed by former FTX customers in the Southern District of Florida, pending final approval from U.S. District Judge K. Michael Moore.

“Fenwick & West LLP, the Silicon Valley law firm that served as lead outside counsel for collapsedcryptoexchange FTX, agreed to pay $54 million to settle a federal class-action lawsuit filed by former FTX customers”

Bitcoin News

The plaintiffs alleged Fenwick went well beyond standard legal advice, claiming the firm helped craft strategies that enabled FTX to commingle customer funds with those of Alameda Research, the affiliated trading firm controlled by FTX founder Sam Bankman-Fried.

Bloomberg Law News

Fenwick denied the allegations and said it was not aware of any fraud at FTX, stands by its legal work, and agreed to settle in order to move forward with its business.

The agreement requires the $54 million to be deposited into an escrow account within 120 days of initial court approval, and it does not admit wrongdoing by the firm.

The settlement is part of the broader multidistrict litigation known as In Re: FTXCryptocurrencyExchange Collapse Litigation, after FTX collapsed in November 2022 and triggered bankruptcy that exposed a fraud that wiped out billions in customer funds.

Plaintiffs argued that Fenwick “facilitated FTX’s fraud” by playing “a key and crucial role in the most important aspects of why and how the FTX fraud was accomplished,” according to the original complaint.

They said Fenwick helped the now-bankrupt FTX obscure the misuse of customer funds by creating legal entities, structures and other strategies to hide the commingling of funds, including transfers between the exchange and its trading arm, Alameda Research.

Cointelegraph

The strategies plaintiffs described also included advising FTX on creating legal structures that would alleviate the exchange from having to acquire money transmitter licenses.

Fenwick, in a statement on Friday, said it “was not aware of the fraud at FTX, stands by the integrity of its legal work, and disputes wrongdoing of any kind,” and it said it “look forward to putting this matter behind us.”

The settlement was filed on Friday in federal court in Miami, Florida, and must still be approved by a US judge, with Fenwick having initially sought dismissal before agreeing to settle with the plaintiffs in February.

Beyond the Fenwick settlement, the FTX Recovery Trust distributed $2.2 billion to damaged parties in March, and the next tranche of reimbursements is scheduled for May 29.

The same reporting described how customers and former creditors said the Trust has mismanaged liquidation of assets, including selling recovered assets at a steep discount or below all-time high values reached following the collapse of FTX.

The Fenwick deal also sits alongside other professional-services resolutions, with Auditor Prager Metis separately agreeing to pay approximately $11.75 million in related resolutions, pushing combined professional services payouts to roughly $66 million.

Fenwick still faces additional litigation, including a separate lawsuit filed in May 2026 in a Washington, D.C. federal court by roughly 20 individual FTX victims from multiple countries that names Fenwick and seeks compensatory damages, return of legal fees paid by FTX, and punitive damages.

In the criminal case context, Sam Bankman-Fried was sentenced in 2024 to 25 years in prison for stealing roughly $8 billion from customers, and the Fenwick settlement remains pending until Judge Moore signs off, with no funds distributed to the class of former FTX customers until then.