In a notable development, an American law firm Fenwick and the West It agreed to pay $54 million to settle claims arising from its legal services to the defunct cryptocurrency exchange FTX. The proposed settlement, which was filed in federal court in Miami on Friday, was resolved allegations From FTX clients who accused the Silicon Valley-based company of facilitating misconduct related to one of the largest financial frauds in U.S. history.
Fenwick denies knowledge of FTX’s illegal activities despite the settlement
According to court filings as I mentioned By Reuters Fenwick & West served as lead outside counsel to FTX during the exchange’s rapid expansion into a global cryptocurrency trading platform. Plaintiffs in the class action lawsuit alleged that the company “helped formulate and implement strategies that facilitated the FTX fraud,” accusing the attorneys of assisting in the organizational and operational structures later associated with the misuse of client funds.
The proposed settlement agreement still requires approval by U.S. District Judge K. Michael Moore in Miami. Lawyers representing FTX clients, including prominent plaintiff David Boies, argued that the deal was reasonable and would prevent protracted and costly litigation.
However, Fenwick rejected allegations that she knowingly engaged in fraudulent conduct. In a public statement, the law firm said it was “unaware of the fraud at FTX,” adding that it stands by the integrity of its legal work. The $54 million agreement represents the largest settlement in the second wave of class action decisions involving FTX.
Other settlements include an $11.75 million payment from FTX’s former auditor Prager Metis And a $420,000 settlement related to the previous one Miami Heat player Udonis Haslemwhich promoted the exchange.
The journey so far
FTX collapsed in November 2022 after revealing that an estimated $11 to $13 billion in client funds had been transferred to sister trading firm Alameda Research. The exchange’s bankruptcy sparked widespread panic across the digital asset market and wiped out $200 billion from the global cryptocurrency market capitalization.
In 2024, Founder Sam Bankman Fried He was convicted of fraud and conspiracy and sentenced to 25 years in prison. Although he pleaded not guilty he has since appealed the conviction, claiming the initial trial was unfairly biased against him.
Meanwhile, FTX Recovery Trust continued its efforts to compensate affected creditors under the company’s Chapter 11 restructuring process. In March 2026, the company announced a fourth distribution of approximately $2.2 billion, bringing the cumulative premiums to eligible claimants close to $10 billion. Several categories of customers, including many US-based users, have reportedly reached full or near-full recovery levels under the court-approved repayment plan.
Featured image from Adobe Stock, chart from Tradingview
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