FTX law firm Fenwick & West agreed to pay $54 million to settle customer claims that it helped enable the crypto exchange's fraud before it collapsed in 2022.
The preliminary settlement was filed on Friday in federal court in Miami and still needs approval from a judge, Reuters reported on Saturday, May 23.
- Fenwick, a Silicon Valley law firm known for advising technology companies, served as a lead outside law firm for FTX as the Bahamas-based crypto exchange grew into one of the industry's biggest platforms.
FTX customers accused Fenwick in the lawsuit of helping "craft and implement strategies" that allegedly facilitated the exchange's fraud. David Boies, the prominent litigator representing the plaintiffs, and other lead lawyers told the court the settlement was reasonable and would avoid the risk of long and complex litigation.
Fenwick denies wrongdoing
Fenwick didn't admit wrongdoing as part of the proposed deal. The firm said it "was not aware of the fraud at FTX, stands by the integrity of its legal work, and disputes wrongdoing of any kind," Reuters reports. Fenwick also said it looked forward to putting the matter behind it and focusing on its business.
- FTX collapsed in November 2022 after a liquidity crisis exposed a massive hole in customer funds.
- Founder Sam Bankman-Fried was sentenced in 2024 to 25 years in prison for stealing $8 billion from customers, though he pleaded not guilty and has appealed his conviction.