Prominent U.S. law firm Fenwick & West has agreed to pay $54 million to settle claims related to its legal work for collapsed crypto exchange FTX, according to a preliminary settlement filed in federal court in Miami, Florida on May 22, 2026.
According to a Reuters report, the settlement stems from a class action originally filed in 2023 by FTX customers who accused the Silicon Valley-based law firm of helping facilitate conduct that contributed to one of the largest financial fraud cases in U.S. history. The settlement requires approval from U.S. District Judge K. Michael Moore before it becomes final.
Plaintiffs claimed firm helped facilitate FTX operations
According to court filings, plaintiffs alleged that Fenwick helped “craft and implement strategies” that enabled fraudulent activities at FTX during the exchange’s rapid rise in the crypto industry.
More specifically, plaintiffs alleged Fenwick assisted in creating “shadowy entities” designed to facilitate the misappropriation of client assets and to evade regulatory scrutiny. They claimed the firm helped craft strategies that enabled FTX to commingle customer funds with Alameda Research, the affiliated trading firm controlled by FTX Founder Sam Bankman-Fried (SBF).
Fenwick served as one of FTX’s primary outside legal advisors before the exchange filed for Chapter 11 bankruptcy on November 11, 2022, triggering billions of dollars in customer losses and widespread fallout across the digital asset sector.
Attorneys representing affected customers argued that the settlement would help avoid years of lengthy and complex litigation.
Prominent litigator David Boies and other lead attorneys reportedly told the court that the agreement represents a reasonable resolution considering the risks and costs associated with prolonged legal proceedings.
Fenwick denies wrongdoing
In a public statement, Fenwick said it was not aware of fraudulent activity inside FTX and rejected allegations of misconduct. The law firm stated that it “stands by the integrity of its legal work” and disputed “wrongdoing of any kind.” Fenwick also said it looks forward to moving beyond the litigation and continuing to focus on its business operations.
Importantly, the settlement does not include an admission of wrongdoing by Fenwick. The firm agreed to settle to move forward with its business rather than as an admission of liability — a meaningful legal distinction that preserves Fenwick’s posture in the remaining litigation.
The firm, known for representing major technology and startup companies, employs more than 500 lawyers across the United States.
Crucially, the Miami settlement does not resolve all litigation against Fenwick. A separate lawsuit filed in May 2026 in a Washington, D.C. federal court by roughly 20 individual FTX victims from multiple countries remains active. That case — which seeks approximately $525 million in compensatory damages, the return of legal fees Fenwick was paid by FTX, and punitive damages — names Fenwick along with several current and former partners by name. The D.C. case makes similar allegations to the Miami class action, arguing the firm’s legal work enabled the misappropriation of customer funds and helped FTX avoid regulatory oversight.
Another major settlement in expanding FTX fallout
The agreement marks part of a broader second wave of settlements tied to the collapse of FTX.
Earlier settlements in related litigation included agreements involving former FTX executives as bankruptcy proceedings and customer recovery efforts continue.
The collapse of FTX in 2022 became one of the most significant failures in crypto industry history, wiping out billions in customer assets and triggering global investigations into corporate governance, misuse of funds, and financial misconduct.
Sam Bankman-Fried continues appeal
In separate developments, FTX Founder Sam Bankman-Fried, who was sentenced in 2024 to 25 years in prison after being convicted of orchestrating an $8 billion fraud involving customer funds, pleaded not guilty during the trial and continues appealing his conviction.
Prosecutors had accused Bankman-Fried of diverting customer assets to affiliated trading firm Alameda Research while misleading investors, lenders, and users about the exchange’s financial condition. The Second Circuit Court of Appeals held oral arguments on his appeal on November 4, 2025; that ruling remains pending. Separately, on April 28, 2026, Judge Kaplan denied Bankman-Fried’s motion for a new trial, calling his arguments — that newly discovered witnesses would offer exculpatory testimony — “baseless.”
The latest settlement also follows earlier legal scrutiny involving Fenwick’s role in FTX operations. In 2025, Fenwick & West separately faced lawsuits alleging the firm played a role in helping structure entities and legal frameworks connected to FTX’s business activities before the collapse.
For FTX victims, the Fenwick settlement adds to a stream of partial recoveries that remain small relative to total losses. Professional services firms associated with the now-defunct exchange — including auditors, lawyers, and promoters — have faced growing scrutiny since the collapse over how much they knew and what role, if any, their work played in enabling the fraud.
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