US law firm Fenwick & West has agreed to pay $54 million to settle claims tied to its legal work for the defunct cryptocurrency exchange FTX. The proposed settlement, filed in federal court in Miami on Friday, seeks to resolve allegations from FTX customers who accused the Silicon Valley-based firm of facilitating misconduct at the exchange. The agreement remains subject to court approval.
Settlement Overview
The filing outlines a $54 million payment by Fenwick & West to resolve customer claims arising from the firm’s representation of FTX before the exchange’s collapse. If approved, the settlement would end the litigation against the firm brought by FTX customers in Miami federal court. Additional terms were not disclosed in the filing.
Allegations and Legal Context
Plaintiffs alleged that Fenwick & West’s legal services aided wrongdoing at FTX, contributing to customer losses when the exchange failed. The settlement does not constitute a finding of liability and is intended to resolve the dispute without further litigation. Law firms and other advisers to crypto companies have faced heightened scrutiny following a series of industry failures beginning in 2022.
Background on FTX
FTX, once one of the world’s largest crypto exchanges, filed for bankruptcy in November 2022 after a liquidity crisis exposed significant shortfalls in customer funds. The collapse sparked multiple civil and regulatory actions and led to the criminal prosecution of FTX founder Sam Bankman-Fried, who was convicted in 2023 and sentenced in 2024. Customers have pursued recoveries through bankruptcy proceedings and related litigation against entities connected to the exchange.
What’s Next
The court will review the proposed settlement for approval. If granted, the agreement would resolve the claims against Fenwick & West while broader efforts to compensate FTX customers continue through ongoing bankruptcy and civil proceedings.