In a significant legal development, Fenwick & West LLP has reached an agreement to disburse $54 million to settle a class action lawsuit initiated by former FTX customers. This settlement, which requires judicial approval, stems from allegations that the law firm played a critical role in enabling fraudulent practices at the now-defunct cryptocurrency exchange.
The plaintiffs contend that Fenwick facilitated FTX’s fraudulent activities by establishing legal entities and strategies that concealed the misuse of customer funds. These actions included advising FTX on how to avoid the necessity of acquiring money transmitter licenses, thus further complicating the situation surrounding the misuse of funds between FTX and its trading partner, Alameda Research.
This agreement follows a previous attempt by Fenwick to dismiss the lawsuit, which was ultimately abandoned in February 2026. The firm still faces a daunting $525 million lawsuit regarding its involvement in the FTX collapse, which had far-reaching implications for the cryptocurrency sector.
Additionally, the FTX Recovery Trust is expected to distribute further reimbursements on May 29, although former customers have raised concerns about the Trust's management of asset liquidation, claiming assets are being sold at steep discounts.