Remarkably, an American law firm Fenwick and West agreed to pay $54 million to settle claims arising from its legal services for the defunct crypto exchange FTX. The proposed settlement, filed Friday in Miami federal court, resolves allegations by FTX customers who accused the Silicon Valley-based company of facilitating misconduct related to one of the largest financial frauds in U.S. history.
Fenwick denies knowledge of FTX’s illicit activities despite settlement
According to court documents reported by Reuters, Fenwick & West served as one of FTX’s lead outside counsel during the exchange’s rapid expansion into a global cryptocurrency trading platform. The class action plaintiffs alleged that the firm “helped develop and implement strategies that facilitated FTX’s fraud,” accusing the attorneys of contributing to the regulatory and operational structures later linked to the misuse of client funds.
The proposed settlement agreement still requires approval from U.S. District Judge K. Michael Moore in Miami. Lawyers representing FTX clients, including prominent litigator David Boies, argued that the agreement was reasonable and would avoid protracted and costly litigation.
However, Fenwick rejected allegations that she knowingly participated in fraudulent conduct. In a public statement, the law firm said it “was not aware of the fraud at FTX,” adding that it stood by the integrity of its legal work. The $54 million settlement marks the largest settlement in a second wave of FTX-related class action resolutions.
Other settlements include an $11.75 million payment from FTX’s former auditor. Prager Métis and a $420,000 settlement involving former Miami Heat player Udonis Haslemwho promoted the exchange.
The journey so far
FTX collapsed in November 2022 after revelations that approximately $11-13 billion in customer funds were diverted to its sister trading company, Alameda Research. The exchange’s collapse sparked widespread panic in the digital asset market and erased $200 billion in global crypto market capitalization.
In 2024, founder Sam Bankman-Fried was convicted of fraud and conspiracy and sentenced to 25 years in prison. Although he pleaded not guilty and has since appealed the conviction, claiming the original trial was unfairly biased against him.
Meanwhile, the FTX Recovery Trust continued its efforts to repay affected creditors as part of the company’s Chapter 11 restructuring process. In March 2026, the estate announced a fourth distribution of approximately $2.2 billion, bringing cumulative reimbursements to eligible claimants to nearly $10 billion. Several classes of customers, including many U.S.-based users, have reportedly reached full or near-full recovery levels under the court-approved repayment plan.
Featured image from Adobe Stock, chart from Tradingview
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