Fenwick & West, the former outside counsel to FTX, has agreed to pay $54 million to victims of the collapsed crypto exchange in a settlement reached in February 2026. The firm also faces a separate $525 million lawsuit alleging it played a role in FTX’s failure.
Settlement to Compensate FTX Victims
The $54 million settlement is intended to provide compensation to individuals affected by FTX’s collapse. Specific terms of the agreement were not disclosed, but the resolution marks a notable development in ongoing efforts to recover funds tied to the exchange’s failure.
Separate $525M Lawsuit Ongoing
In addition to the settlement, Fenwick & West remains a defendant in a separate $525 million lawsuit that alleges the firm’s work for FTX contributed to the exchange’s collapse. The case underscores the legal exposure facing professional service providers connected to FTX’s operations prior to its bankruptcy. No judgment has been reached in that matter.
Background on FTX’s Collapse
FTX, once one of the world’s largest cryptocurrency exchanges, filed for bankruptcy in November 2022 following a sudden liquidity crisis and revelations of multibillion-dollar shortfalls in customer funds. Former CEO Sam Bankman-Fried was convicted of fraud and other charges in 2023 and sentenced in 2024, as bankruptcy administrators continue efforts to recover assets for creditors.
What It Means for Creditors and Advisors
The settlement adds to a series of recoveries and legal actions aimed at compensating FTX customers and creditors. It also highlights the intensifying scrutiny on advisers and counterparties that worked with the exchange before its collapse, as courts and plaintiffs seek accountability across the broader FTX ecosystem.