Fenwick & West LLP, the Silicon Valley law firm that served as lead outside counsel to the collapsed cryptocurrency exchange FTX, has agreed to pay $54 million to settle a federal class-action lawsuit brought by former FTX customers. The proposed agreement was filed this week and remains subject to court approval.
Settlement Overview
The deal would resolve claims from FTX customers who alleged losses stemming from the exchange’s failure and accused the firm of bearing some responsibility because of its advisory role. Specific terms, including timelines and distribution mechanics, are expected to be detailed in forthcoming court filings and any final approval order.
Background on the Case
FTX filed for bankruptcy in November 2022 after a liquidity crisis exposed significant shortfalls in customer funds. The collapse triggered multiple civil lawsuits and regulatory actions, as well as criminal proceedings against former executives. Sam Bankman-Fried, FTX’s founder, was convicted in 2023 on fraud and conspiracy charges and sentenced in 2024.
Fenwick & West advised FTX and certain affiliates during the exchange’s rapid growth, according to prior disclosures. Plaintiffs in the class action alleged that, given that role, the firm should be held liable for a portion of customers’ losses. The settlement, if approved, would conclude those claims against Fenwick & West without further litigation.
What Comes Next
The court will review the proposed settlement, and a hearing date for final approval is expected to be scheduled. If approved, a claims administration process would determine eligibility and distributions to class members. The settlement is separate from ongoing recoveries through FTX’s bankruptcy, where the estate continues to pursue assets for creditors and customers.
Why It Matters
The agreement highlights the continuing legal fallout from FTX’s failure and the scrutiny facing professional service providers involved with major crypto firms. It also represents a potential additional recovery path for former FTX customers beyond the bankruptcy estate’s efforts.