FTX users reached a proposed settlement with Fenwick & West regarding a lawsuit initiated in 2023. This lawsuit accused the law firm of being significantly involved in the fraudulent activities that culminated in the collapse of the crypto exchange, a claim that Fenwick has denied.
In a joint filing submitted to a Florida federal court, Fenwick and attorneys representing FTX users stated that they seek court approval for the proposed settlement on Feb. 27.
The details of the agreement were not disclosed, yet both sides requested a halt on all deadlines and ongoing motions within the class-action suit while they finalize the settlement.
This lawsuit is part of a broader class-action case that arose following the collapse of FTX in late 2022. Many users have filed claims against the exchange itself, and several celebrities are accused of promoting it.
The initial suit, updated in August, claimed that Fenwick played an essential role in how FTX’s fraudulent activities were executed, alleging they provided substantial assistance by setting up structures that facilitated these frauds.
The allegations further stated that Fenwick advised FTX on business structuring to circumvent registration as a money transmitter and had insight into the mingling of funds between FTX and Alameda Research.
Fenwick attempted to dismiss the lawsuit, proclaiming it wasn’t responsible for aiding in a fraud that it was unaware of, and claimed to have provided only standard legal services.
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The court allowed the amended complaint from FTX users to move forward in November, denying Fenwick’s dismissal request.
Fenwick & West and Moskowitz Law Firm, representing FTX users, have yet to comment on the current situation.
In February 2024, FTX users also sued Sullivan & Cromwell, FTX’s previous outside counsel, alleging involvement in the multibillion-dollar fraud. That complaint was voluntarily dismissed eight months later due to insufficient evidence.
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