Fenwick & West Hit With $525 Million Lawsuit Over Alleged Role in FTX Collapse

A group of 20 FTX victims has filed a $525 million lawsuit against law firm Fenwick & West, accusing the firm of helping support and conceal fraud tied to the collapsed cryptocurrency exchange.

The lawsuit, filed in a US federal court in Washington, D.C., claims the Silicon Valley law firm did more than provide legal services to FTX. Plaintiffs argue the firm helped create structures that allowed misuse of customer funds to continue while giving the exchange an appearance of legitimacy.

The victims, from five different countries and jurisdictions, say they lost life savings after FTX collapsed in November 2022.

Former FTX Executive Testimony Central to Lawsuit

A major part of the complaint relies on testimony from former FTX engineering director Nishad Singh, who pleaded guilty to fraud charges and later testified during Sam Bankman-Fried’s criminal trial.

According to the lawsuit, Singh told Fenwick lawyers that customer funds were being misused. Plaintiffs claim the firm did not distance itself from FTX and instead advised on ways to continue operations.

The lawsuit also alleges Fenwick helped create North Dimension Inc., a Delaware-based shell company allegedly used to move more than $3 billion in customer funds. Attorneys are also accused of implementing FTX’s Signal auto delete messaging system, which prosecutors previously said made investigations more difficult.

Bankruptcy Findings Add Pressure

The complaint points to findings from a court-appointed bankruptcy examiner, who reviewed more than 200,000 documents and concluded Fenwick was closely involved in the structure of FTX and Alameda Research.

Plaintiffs are seeking more than $525 million in damages, repayment of legal fees earned from FTX and punitive damages against specific partners tied to the case.