Image Credit: Shutterstock
Fenwick & West LLP has agreed to pay $54 million to settle a class-action lawsuit brought by former FTX customers over its work for the collapsed crypto exchange.
The proposed settlement was filed in federal court in Miami and still requires judicial approval. Fenwick was one of FTX’s lead outside law firms before the exchange collapsed in 2022.
Fenwick Denies Wrongdoing in FTX Lawsuit
The lawsuit accused Fenwick of going beyond ordinary legal services and helping FTX build entities, structures and strategies that allegedly concealed the misuse of customer funds.
Fenwick denied wrongdoing and said it provided legitimate legal services, but agreed to settle the claims instead of continuing the litigation. The settlement does not include an admission of liability. It instead gives former FTX customers another possible recovery source as litigation tied to the exchange continues.
$54M Settlement Would go Into Escrow
Under the proposed deal, Fenwick would place the $54 million into an escrow account after preliminary court approval. Reports on the settlement said the escrow deposit would be made within 120 days of preliminary approval.
The money would then be used for customer compensation, administrative expenses and any court-approved legal fees. The agreement is part of a wider recovery effort by former FTX customers pursuing claims against advisers, service providers and other parties linked to the exchange before its failure.
Separate $525M Fenwick Lawsuit Remains
The Miami settlement does not fully end Fenwick’s FTX-related exposure. The firm is also facing a separate lawsuit from another group of FTX victims seeking more than $525 million. That case was filed in Washington, D.C., and is not covered by the Miami settlement.
The separate complaint also focuses on Fenwick’s alleged role in FTX’s legal and corporate structure. Fenwick has denied wrongdoing in related litigation and has maintained that its work for FTX was legitimate legal advice.
FTX Adviser Liability Stays in Focus
The settlement adds another recovery track for former FTX customers and keeps professional advisers in focus. FTX litigation has already moved beyond former executives and celebrity promoters. Plaintiffs are also targeting law firms, financial advisers and other service providers that worked with the exchange before its collapse.
For Fenwick, the Miami settlement would remove one major class-action track if approved by the court. But the separate $525 million lawsuit means broader questions about adviser liability in the FTX collapse remain unresolved.
