Fenwick & West, a prominent Silicon Valley law firm, has rejected allegations that it played a central role in the collapse of crypto exchange FTX, calling the claims “facile” and “flawed” in a court filing on Monday.
Key Takeaways:
- Fenwick & West has rejected claims it enabled FTX’s collapse, calling the allegations speculative and flawed.
- The firm argues it only provided routine legal services and had no knowledge of fraud.
- Fenwick says the amended lawsuit recycles claims already dismissed in similar cases, including those against Sullivan & Cromwell.
The legal pushback comes in response to an amended class-action lawsuit filed by FTX customers earlier this month in a Florida federal court.
Plaintiffs are seeking to update their 2023 suit, arguing that recent revelations from FTX’s bankruptcy proceedings and the criminal trial of founder Sam Bankman-Fried suggest Fenwick provided key legal support that enabled the fraud.
Fenwick Dismisses FTX Allegations as Speculative and Misleading
In its filing, Fenwick dismissed the allegations as speculative and misleading, asserting it merely provided routine legal services typical of any outside counsel.
“Fenwick is not liable for aiding and abetting a fraud it knew nothing about,” the firm wrote, “based solely on allegations that Fenwick did what law firms do every day — provide routine and lawful legal services to their clients.”
The plaintiffs’ broader class-action case also includes claims against celebrities and companies linked to FTX.
While law firm Sullivan & Cromwell was initially named in the case, it was later dropped after a court-appointed examiner found no evidence the firm had knowledge of the fraud.
Fenwick said the latest complaint recycles similar accusations previously made against Sullivan & Cromwell, noting the plaintiffs “offer no credible reason why the same allegations should survive against Fenwick.”
Central to the new claims is testimony from Nishad Singh, FTX’s former lead engineer, who reportedly discussed Fenwick’s involvement in structuring loans.
Fenwick countered that Singh did not accuse the firm of helping cover up misuse of customer funds. Instead, the testimony described standard legal work on “founder loans,” which are common in startups.
Fenwick also argued that dozens of witnesses in Bankman-Fried’s criminal trial testified to being unaware of the fraud, including FTX’s internal lawyers, employees, and other external advisors, adding that “Fenwick is no different.”
Fenwick Rejects Claims It Promoted FTX’s FTT Token
The firm further criticized new allegations that it helped launch and promote FTT, FTX’s exchange token, as violating Florida and California securities laws.
Fenwick labeled those claims “frivolous” and “untimely,” accusing plaintiffs of filing them only after a judge allowed state securities claims to proceed against celebrity endorsers.
“This is an eleventh-hour attempt to recast lawyers as ‘promoters,’” Fenwick said. “But this theory too goes nowhere.”
The court has yet to rule on whether the amended complaint will be accepted.
As reported, FTX has announced that it will begin its next round of cash distributions to creditors on or around September 30, 2025. The record date for eligible claimants was set for August 15.
The payments will be processed through FTX’s designated distribution partners, including BitGo, Kraken, and Payoneer.
Meanwhile, a Chinese creditor representing over 300 users is opposing FTX’s proposal to restrict payouts in 49 jurisdictions, including China, arguing it is legally unfounded and unfair.
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