- The suit claimed that the law firm helped enable the fraud that brought down the exchange.
- Parties announced the agreement in a joint filing to a Florida federal court.
- As for the settlement details, the financial terms have not been disclosed yet.
FTX customers and the Silicon Valley law firm Fenwick & West have reached a settlement deal in a group lawsuit. The suit claimed that the law firm helped enable the fraud that brought down the FTX exchange in 2022. The parties announced the agreement in a joint filing to a Florida federal court, with plans to seek final judicial approval on February 27, 2026.
First filed in 2023, the lawsuit is a part of many legal cases that started after FTX went bankrupt and locked millions of users out of their accounts.
The plaintiffs claimed that the law firm was a key enabler of the fraud. They alleged Fenwick & West set up legal structures that helped FTX avoid rules and allowed customer funds to be mixed with the funds of Alameda Research, FTX’s sister company.
Fenwick & West denied any wrongdoing, stating it only provided normal legal services and was not aware of any fraud. The firm had tried to get the case thrown out, but a judge allowed it to continue in November 2025.
As for the settlement details, the financial terms have not been disclosed yet. The two sides have asked the court to put the case on hold until a judge officially signs off on the settlement.
It’s worth noting that the settlement does not mean Fenwick & West admitted to doing anything wrong, as these types of deals often require no admission of guilt.
For FTX users who lost funds, the agreement is a big step toward some resolution after years of lawsuits and bankruptcy court.
Legal Action Against FTX
This was part of a bigger effort by FTX victims to take legal action against more than just the company’s leaders, as they also targeted its lawyers and business partners.
Previously, FTX users had sued the law firm Sullivan & Cromwell for allegedly helping FTX, but they dropped the case when evidence was lacking. Other lawsuits went after celebrities who promoted FTX, and some of those have already been settled.
Once one of the world’s largest crypto exchanges, FTX filed for bankruptcy in November 2022. Its downfall followed the disclosure that it had improperly mixed user assets with its sister trading firm, Alameda Research, resulting in a catastrophic liquidity crisis.
Sam Bankman-Fried, FTX’s ex-CEO, was found guilty of fraud in 2023 and was sentenced to 25 years in prison in March 2024.
Related: FTX Sold Too Early: Anthropic Stake Now Implied at Up to $20B
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