Fenwick & West Sued in Washington, D.C. Over FTX Collapse, Plaintiffs Seek $525 Million

Fenwick & West LLP was sued in Washington, D.C., district court over its alleged role in the collapse of the FTX cryptocurrency exchange, with plaintiffs demanding at least $525 million in damages.

“Litigation Print Share To: Fenwick & West LLP was sued Wednesday over its alleged role in the collapse of the FTX cryptocurrency exchange”

Bloomberg Law News

Bloomberg Law News says the Silicon Valley law firm was FTX’s primary outside counsel for years until the cryptocurrency exchange collapsed in 2022.

Bloomberg Law News

Bloomberg Law News also states that FTX founder Samuel Bankman-Fried was convicted on seven fraud- and money laundering-related counts and sentenced to 25 years in prison.

Cointelegraph adds that after FTX filed for bankruptcy in November 2022, Fenwick scrubbed all mentions of the exchange from its website and quietly hired top-tier defense lawyers at Gibson Dunn before any civil lawsuit was filed against it.

The lawsuit described by Cointelegraph says plaintiffs are bringing seven claims against Fenwick, including malpractice, fraud and gross negligence.

Cointelegraph reports that the plaintiffs are seeking compensatory damages exceeding $525 million, return of all legal fees Fenwick earned from FTX and punitive damages against partners Tyler Newby and Daniel Friedberg for “deliberate and reckless individual professional conduct.”

Cointelegraph

Law | Other frames the fee request as 9.3% of the settlement fund and quotes class counsel Eric Holland calling it "quite modest," while also naming Chris Seeger of Seeger Weiss as co-class counsel.

Bloomberg Law News says Fenwick had knowledge of FTX’s breach of its fiduciary duties by misappropriating billions of dollars in customer assets, and created shell companies and communications controls to hide the evidence.

Cointelegraph says the plaintiffs’ suit follows FTX’s bankruptcy filing in November 2022 and Fenwick’s subsequent actions, including scrubbing mentions of the exchange from its website.

“Publication Legaltech News Reporting, and expert analysis of legal technology with a focus onwhat legal departments, law firms, and tech companies need to know Ranking The 2025 Am Law 100 Rankings The Am Law 100 is the definitive ranking of the 100 largest law firms in the United States”

Law

Cointelegraph also points to Judge Lewis Kaplan, who sentenced the former FTX CEO to 25 years in prison in 2024, and says Kaplan denied Bankman-Fried’s bid for a new trial last month.

In that context, Cointelegraph reports that Kaplan called Bankman-Fried’s claims “wildly conspiratorial and entirely contradicted by the record.”

Law | Other adds that the litigation includes a standing fight over session replay software, where courts found that merely alleging one's online movements have been tracked is not enough to establish a claim.