Silicon Valley Law Firm Fenwick & West Settles FTX Fraud Claims for $54 Million

3.9

★

460 User Rating

Key Takeaways:

Fenwick & West agreed to pay $54 million to settle FTX customer claims, pending approval by Judge K. Michael Moore.The deal brings combined professional services payouts tied to the FTX collapse to roughly $66 million.A separate $525 million lawsuit filed in May 2026 in D.C. by 20 FTX victims names Fenwick and several of its partners.

Lawfirm Cuts $54M Deal With FTX Customers After Lead Counsel Allegations

Fenwick wholeheardily denied the allegations. The firm said it was not aware of any fraud at FTX, stands by its legal work, and agreed to settle in order to move forward with its business.

Plaintiffs’ motion for preliminary approval of the second tranche of settlements, provisional certification of the proposed settlement class, and approval of the proposed schedule. Source: In Re: FTX Cryptocurrency Exchange Collapse Litigation (1:23-md-03076).

Under the terms, the $54 million will be deposited into an escrow account within 120 days of initial court approval. Plaintiffs’ attorneys said the deal was reasonable given the complexity and cost of continued litigation.

FTX collapsed in November 2022, triggering bankruptcy and exposing a fraud that wiped out billions in customer funds. Bankman-Fried was sentenced in 2024 to 25 years in prison for stealing roughly $8 billion from customers.

The Fenwick agreement is part of a second wave of class-action settlements tied to the FTX collapse. Earlier deals involved FTX executives Caroline Ellison, Nishad Singh, and Gary Wang, as well as celebrity promoters. Auditor Prager Metis separately agreed to pay approximately $11.75 million in related resolutions, pushing combined professional services payouts to roughly $66 million.

For FTX victims, the settlement adds to a stream of partial recoveries that remain small relative to total losses. Professional services firms associated with the now-defunct exchange have faced growing scrutiny since the collapse over how much they knew and what role, if any, their work played in enabling the fraud.

The Fenwick deal does not resolve all claims against the firm. A separate lawsuit filed in May 2026 in a Washington, D.C. federal court by roughly 20 individual FTX victims from multiple countries remains active. That case names Fenwick, along with several current and former partners, and seeks compensatory damages, return of legal fees paid by FTX, and punitive damages.

The D.C. suit makes similar allegations, arguing the firm’s legal work enabled the misappropriation of customer funds and helped FTX avoid regulatory oversight. Final court approval of the $54 million class-action settlement is still pending. Until Judge Moore signs off, no funds will be distributed to the class of former FTX customers.