Fenwick & West to pay $54M to settle FTX customer suit

Fenwick & West LLP, the Silicon Valley law firm that served as lead outside counsel for FTX, agreed to pay $54 million to settle a federal class-action brought by former FTX customers. The firm denied any wrongdoing in the filing and the settlement remains subject to final approval by U.S. District Judge K. Michael Moore.

The proposed agreement was filed this week in the Southern District of Florida as part of the multidistrict litigation In Re: FTX Cryptocurrency Exchange Collapse Litigation (1:23-md-03076). Under the terms, the $54 million must be placed into an escrow account within 120 days of initial court approval. No funds will be distributed to class members until Judge Moore signs off on the settlement.

Plaintiffs were represented by attorney David Boies. The filing notes Fenwick initially moved to dismiss the claims before entering settlement negotiations. The motion filed with the court seeks preliminary approval of the proposed settlement class and a schedule for moving the case forward as part of a second wave of resolutions tied to the FTX collapse.

The complaint alleges Fenwick did more than provide routine legal advice and helped design strategies and structures that allowed FTX to commingle customer funds with Alameda Research, the trading firm affiliated with FTX founder Sam Bankman‑Fried. The plaintiffs described the firm’s role as creating “shadowy entities” and legal arrangements that obscured misuse of customer assets. Fenwick rejected those allegations, stated it was not aware of any fraud at FTX, and said it stands by its legal work. The settlement does not include an admission of liability.

Plaintiffs’ attorneys argued the proposed payment was reasonable given the complexity and cost of continued litigation. The filing asks the court to provisionally certify the settlement class and approve a timetable for notice and a final fairness hearing.

The Fenwick agreement raises combined professional services recoveries tied to the FTX collapse to about $66 million, after an approximately $11.75 million resolution with auditor Prager Metis. Earlier settlements in the broader litigation resolved claims against former FTX executives including Caroline Ellison, Nishad Singh and Gary Wang, along with agreements involving celebrity promoters.

A separate lawsuit filed in May 2026 in federal court in Washington, D.C., by roughly 20 FTX victims from multiple countries remains active. That complaint seeks about $525 million, names Fenwick and several current and former partners, and seeks compensatory damages, the return of legal fees paid by FTX, and punitive damages. The D.C. suit raises similar allegations that Fenwick’s legal work enabled the misappropriation of customer funds and helped FTX avoid regulatory oversight.

The litigation stems from FTX’s collapse in November 2022, which led to bankruptcy and exposed fraud that wiped out billions in customer assets. Sam Bankman‑Fried was convicted and, in 2024, sentenced to 25 years in prison for stealing roughly $8 billion from customers. The Fenwick settlement is one of several efforts by victims and trustees to recover assets through litigation and other remedies.