In a notable development, American law firm Fenwick and West The defunct crypto exchange has agreed to pay $54 million to settle claims arising from its legal services. ftx. The proposed settlement, filed in federal court in Miami on Friday, resolves allegations from FTX customers who accused the Silicon Valley-based firm of facilitating misconduct linked to one of the largest financial frauds in US history.
Fenwick denies knowledge of FTX’s illegal activities despite settlement
According to court filings reported by Reuters, Fenwick & West served as a lead outside counsel for FTX during the exchange’s rapid expansion into a global crypto trading platform. Plaintiffs in the class action lawsuit allege that the firm “helped formulate and implement strategies that facilitated FTX’s fraud,” accusing the lawyers of assisting in the regulatory and operational structures that were later linked to the misuse of customer funds.
The proposed settlement agreement is still pending before a U.S. District Judge in Miami. Requires approval from Michael Moore. Lawyers representing FTX clients, including lead litigator David Boies, argued that the deal was fair and would prevent lengthy and costly litigation.
However, Fenwick rejected allegations that he knowingly participated in fraudulent conduct. In a public statement, the law firm said it was “not aware of fraud at FTX,” adding that it stands by the integrity of its legal work. The $54 million settlement marks the largest settlement in the second wave of FTX-related class action resolutions.
Other settlements include an $11.75 million payment from a former FTX auditor Prager Metis and a $420,000 settlement that also included former Miami Heat player udonis haslemWhich promoted exchange.
journey so far
FTX collapsed in November 2022 after revelations that an estimated $11-$13 billion in client funds were allegedly diverted to its affiliate trading firm, Alameda Research. The exchange’s bankruptcy caused widespread panic in the digital asset market and led to the loss of $200 billion in global crypto market capitalization.
In 2024, Founder Sam Bankman-Fried Pleaded guilty to fraud and conspiracy charges and was sentenced to 25 years in prison. However he pleaded not guilty and has since appealed against the conviction, claiming that the initial hearing was unfairly biased against him.
Meanwhile, the FTX Recovery Trust continues efforts to reimburse affected creditors as part of the company’s Chapter 11 reorganization process. In March 2026, the estate announced a fourth distribution of approximately $2.2 billion, bringing cumulative repayments to eligible claimants close to $10 billion. Several customer classes, including several US-based users, have reportedly reached full or near-full recovery levels under the court-approved repayment plan.
Featured image from Adobe Stock, chart from TradingView
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