FTX Users Seek to Strengthen Lawsuit Against Fenwick & West With New Evidence
FTX customers are pushing to update their class-action lawsuit against law firm Fenwick & West, citing fresh details from Sam Bankman-Fried’s criminal trial and FTX’s ongoing bankruptcy proceedings. The plaintiffs argue that the firm played a central role in enabling the alleged fraud at the now-collapsed crypto exchange.
The lawsuit, originally filed earlier this year, accuses Fenwick & West of providing legal services that facilitated FTX’s misconduct. Customers claim the firm helped structure transactions and entities that allowed FTX to misappropriate user funds. With new information emerging from Bankman-Fried’s trial and bankruptcy court filings, plaintiffs believe they have stronger grounds to hold the law firm accountable.
During Bankman-Fried’s trial, prosecutors presented evidence suggesting that Fenwick & West advised FTX on regulatory strategies and corporate structures that may have obscured the misuse of customer deposits. The plaintiffs now seek to incorporate these findings into their complaint, arguing that the firm’s involvement was more extensive than previously known.
Additionally, documents from FTX’s bankruptcy case have revealed further details about the exchange’s financial mismanagement. Customers allege that Fenwick & West’s legal guidance contributed to the lack of proper oversight, enabling billions in customer funds to be diverted to Alameda Research, FTX’s affiliated trading firm.
The lawsuit highlights the growing scrutiny of professional service providers in the crypto industry, particularly those who worked closely with failed platforms. If successful, the case could set a precedent for holding law firms and other advisors liable for their role in facilitating fraudulent schemes.
FTX customers are seeking damages for their losses, claiming that Fenwick & West’s actions directly contributed to the collapse of the exchange. The case remains ongoing, with the plaintiffs aiming to strengthen their arguments using the latest evidence from related legal proceedings.
As the crypto industry continues to grapple with the fallout from FTX’s downfall, this lawsuit underscores the legal risks faced by firms that provided services to the exchange. The outcome could influence how regulators and courts view the responsibilities of legal and financial advisors in the digital asset space.
