Key Takeaways
Fenwick & West agreed to pay $54 million to settle FTX buyer claims, pending approval by Choose Okay. Michael Moore.The deal brings mixed skilled companies payouts tied to the FTX collapse to roughly $66 million.A separate $525 million lawsuit filed in Could 2026 in D.C. by 20 FTX victims names Fenwick and several other of its companions.
Lawfirm Cuts $54M Deal With FTX Clients After Lead Counsel Allegations
The proposed settlement was filed this week within the Southern District of Florida and requires ultimate approval from U.S. District Choose Okay. Michael Moore. The settlement doesn’t admit wrongdoing by the agency.
Plaintiffs alleged Fenwick went effectively past commonplace authorized recommendation, claiming the agency helped craft methods that enabled FTX to commingle buyer funds with these of Alameda Analysis, the affiliated buying and selling agency managed by FTX founder Sam Bankman-Fried. They described the agency’s alleged function as creating “shadowy entities” and authorized buildings that obscured the misuse of buyer belongings.
Fenwick wholeheardily denied the allegations. The agency mentioned it was not conscious of any fraud at FTX, stands by its authorized work, and agreed to settle to be able to transfer ahead with its enterprise.
The lawsuit is a part of the broader multidistrict litigation often known as In Re: FTX Cryptocurrency Trade Collapse Litigation. Legal professional David Boies represented plaintiffs within the case. Fenwick initially sought dismissal earlier than partaking in settlement talks.
Beneath the phrases, the $54 million can be deposited into an escrow account inside 120 days of preliminary courtroom approval. Plaintiffs’ attorneys mentioned the deal was cheap given the complexity and price of continued litigation.
FTX collapsed in November 2022, triggering chapter and exposing a fraud that worn out billions in buyer funds. Bankman-Fried was sentenced in 2024 to 25 years in jail for stealing roughly $8 billion from clients.
The Fenwick settlement is a part of a second wave of class-action settlements tied to the FTX collapse. Earlier offers concerned FTX executives Caroline Ellison, Nishad Singh, and Gary Wang, in addition to movie star promoters. Auditor Prager Metis individually agreed to pay roughly $11.75 million in associated resolutions, pushing mixed skilled companies payouts to roughly $66 million.
For FTX victims, the settlement provides to a stream of partial recoveries that stay small relative to whole losses. Skilled companies companies related to the now-defunct change have confronted rising scrutiny because the collapse over how a lot they knew and what function, if any, their work performed in enabling the fraud.
The Fenwick deal doesn’t resolve all claims towards the agency. A separate lawsuit filed in Could 2026 in a Washington, D.C. federal courtroom by roughly 20 particular person FTX victims from a number of nations stays energetic. That case names Fenwick, together with a number of present and former companions, and seeks compensatory damages, return of authorized charges paid by FTX, and punitive damages.
The D.C. swimsuit makes comparable allegations, arguing the agency’s authorized work enabled the misappropriation of buyer funds and helped FTX keep away from regulatory oversight. Last courtroom approval of the $54 million class-action settlement remains to be pending. Till Choose Moore indicators off, no funds can be distributed to the category of former FTX clients.
