FTX legal adviser Fenwick settles customer lawsuit for $54m

Fenwick & West has agreed to pay $54 million to settle a class action lawsuit filed by former FTX customers who accused the law firm of helping facilitate fraud at the collapsed cryptocurrency exchange.

According to court filings tied to the proposed settlement, the Silicon Valley law firm reached the agreement after initially trying to dismiss the case brought by former FTX users in 2023. The settlement still requires approval from a U.S. judge before it can take effect.

Former customers of the exchange alleged that Fenwick played a central role in legal and corporate arrangements that allowed FTX and its affiliated trading firm, Alameda Research, to move and commingle customer funds without proper safeguards. Plaintiffs claimed the firm helped create structures and entities designed to obscure how customer assets were handled inside the FTX group.

Court records from the original complaint alleged that Fenwick also advised FTX on legal strategies intended to avoid money transmitter licensing requirements in some jurisdictions.

Earlier filings from August 2025 added further accusations against the law firm after plaintiffs sought permission to amend their complaint using evidence from Sam Bankman-Fried’s criminal trial and the FTX bankruptcy process. In that proposed amended filing, former FTX customers argued that testimony from senior insiders and findings from an independent bankruptcy examiner showed Fenwick had become “deeply intertwined” with the exchange’s operations.

At the time, plaintiffs cited testimony from former FTX executives Nishad Singh, Gary Wang, and Caroline Ellison, who allegedly described internal practices involving improper loans, false statements, and misuse of customer funds. According to the filing, Singh told the court that Fenwick had been informed about some of those activities and advised on legal structures connected to them.

Other allegations in the amended filing accused the law firm of helping establish shell companies linked to Alameda Research and North Dimension, an entity used to route customer deposits. Plaintiffs also pointed to the use of encrypted and auto-deleting Signal chats by FTX executives, which they said Fenwick knew about during its legal representation of the exchange.

At the same time, the filing introduced securities law claims under Florida and California statutes tied to the sale of FTT tokens and other FTX-related investment products. Plaintiffs argued that Fenwick attorneys participated in designing and facilitating those offerings for investors.

Legal fallout from FTX collapse continues

Elsewhere in the FTX fallout, former FTX head of engineering Nishad Singh agreed in April 2026 to pay a $3.7 million disgorgement to settle charges brought by the U.S. Commodity Futures Trading Commission.

According to the CFTC, Singh also accepted a five-year trading ban and an eight-year registration ban as part of the supplemental consent order tied to the misuse of customer funds at FTX. CFTC enforcement director David Miller said the resolution accounted for Singh’s cooperation with investigators.

Separately, the FTX Recovery Trust has continued distributing recovered assets to former customers and creditors. In March, the Trust distributed $2.2 billion to claimants, while another reimbursement round has been scheduled for May 29.