Fenwick & West, one of Silicon Valley’s most established law firms, has agreed to pay $54 million to settle claims that it aided and abetted fraud through its legal work for FTX. The settlement, filed in a Miami federal court, is still subject to judicial approval.
The deal resolves accusations from FTX customers who alleged the firm played a direct role in constructing the corporate architecture that allowed customer funds to be siphoned off and regulatory oversight to be dodged.
What Fenwick allegedly did
The core allegation is striking in its specificity. FTX customers claimed Fenwick & West assisted in creating what they called “shadowy entities” designed to facilitate the misappropriation of client assets and evade regulatory scrutiny.
FTX filed for bankruptcy in November 2022, setting off one of the most spectacular collapses in crypto history. Its founder, Sam Bankman-Fried, was subsequently convicted of fraud and sentenced to prison.
