Latest FTX lawsuit update: Users settle with Fenwick & West, fraud liability comes back into focus
New developments have emerged in the legal storm triggered by the collapse of FTX. Some users of the bankrupt crypto platform have reached a settlement with Silicon Valley law firm Fenwick & West, bringing a temporary end to allegations that the firm assisted in perpetrating fraud. According to joint filings submitted to the U.S. District Court in Florida, both parties plan to submit a formal settlement agreement by February 27, pending court approval. Until the final outcome is reached, related procedures and motions will be postponed, and specific monetary terms have not been disclosed.
This case stems from FTX's sudden collapse in November 2022, which froze assets of millions of users and triggered multiple rounds of class-action lawsuits. The plaintiffs allege that Fenwick & West provided "substantial assistance" in the company's structural design, compliance pathways, and internal arrangements, enabling misconduct to persist over time. They also claim the law firm was aware of client fund commingling and the blurred boundaries between FTX and Alameda Research. Fenwick & West has consistently denied these allegations, emphasizing that its services were routine legal consultations. Nonetheless, the court previously rejected its motion to dismiss, allowing the case to proceed and paving the way for this settlement.