Fenwick & West agrees to pay $54 million to FTX customers over claims it helped structure the exchange’s fraud

Law firm Fenwick & West has agreed to pay $54 million to settle a class-action lawsuit brought by former FTX customers who accused the firm of designing corporate structures that enabled the misuse of customer funds before the exchange collapsed in 2022.

The lawsuit centers on allegations that Fenwick & West played a significant role in creating corporate and legal structures that allegedly enabled the misuse of customer funds between FTX and its affiliated trading firm, Alameda Research.

Plaintiffs argued that the firm went beyond traditional legal advisory work and became “deeply intertwined” with FTX’s operations.

Allegations focused on legal structures and fund movements

According to court filings cited in the lawsuit, former FTX users claimed Fenwick advised on structures linked to Alameda Research and entities such as North Dimension, which plaintiffs alleged were used to route customer deposits and obscure how funds were handled internally.

The complaint also alleged that the law firm advised FTX on strategies designed to avoid money transmitter licensing requirements in certain jurisdictions.

Plaintiffs later expanded their claims in 2025 after drawing on testimony and evidence presented during the criminal proceedings involving former FTX executives.

“Fenwick ‘helped to craft and implement strategies that facilitated FTX’s fraud,’” plaintiffs alleged in filings referenced by Reuters.

The amended complaint reportedly included testimony from former FTX insiders including Nishad Singh, Gary Wang, and Caroline Ellison, who described internal practices involving improper loans and misuse of customer assets.

Plaintiffs argued the testimony demonstrated the law firm had knowledge of some operational structures tied to those activities.

Settlement adds to mounting professional liability pressure

Fenwick & West has not admitted wrongdoing as part of the proposed agreement, according to reports covering the settlement filing.

Reuters described Fenwick as one of FTX’s lead outside legal advisers during the exchange’s rise to prominence in the crypto market.

“Fenwick & West, which advised FTX before its 2022 blockbuster collapse and bankruptcy, will pay $54 million to resolve claims from FTX customers,” Reuters reported.

The agreement also comes as the firm reportedly faces a separate $525 million lawsuit filed in Washington, D.C., targeting both the firm and several individual partners over their alleged involvement with FTX.

For crypto investors and market observers, the settlement highlights how legal advisers, auditors, and other third-party service providers are increasingly being pulled into litigation tied to failed digital asset firms.

FTX fallout continues to impact the crypto market

The collapse of FTX in 2022 remains one of the defining crises in crypto history, triggering billions of dollars in losses and intensifying global calls for stricter oversight of digital asset platforms.

The exchange’s bankruptcy proceedings and related lawsuits continue to unfold years later. Separately, the FTX Recovery Trust has continued distributing recovered assets to former users and creditors.

According to Crypto.news, the trust distributed approximately $2.2 billion to claimants in March, with another reimbursement round scheduled for May 29.

The case is also fueling renewed debate among investors about due diligence, transparency, and the role of external advisers in crypto markets.

While the settlement does not resolve every outstanding claim tied to FTX, it signals that legal and financial consequences from the exchange’s collapse remain far from over.