FTX Customers Seek to Update Lawsuit Against Fenwick & West Over Alleged Role in Collapse

Customers of bankrupt crypto exchange FTX are moving to update their lawsuit against Fenwick & West, a law firm once contracted by FTX, claiming new evidence links it directly to the exchange’s downfall.

According to a court filing on Monday, evidence from Sam Bankman-Fried’s criminal trial and FTX’s bankruptcy proceedings “supports that Fenwick played a key and crucial role in the most important aspects of why and how the FTX fraud was accomplished.”

The filing alleges that the FTX fraud was only possible because Fenwick provided “substantial assistance” by creating and approving structures that enabled multiple fraudulent activities.

Lawsuit Alleges Fenwick Helped Facilitate Fraud

FTX customers accuse Fenwick & West of helping set up and represent conflicted companies like Alameda Research and North Dimension. These entities allegedly had no safeguards to prevent the theft of billions of dollars in customer funds.

The case is part of a multi-district class-action lawsuit filed after FTX collapsed in late 2022. The claims target FTX, celebrity promoters, and several companies that worked with the exchange.

Fenwick has denied the allegations and previously moved to dismiss a similar complaint filed in August 2023.

New Evidence From Sam Bankman-Fried Trial

The proposed amended complaint states that testimony from FTX insiders during Bankman-Fried’s trial revealed Fenwick’s involvement.

Former executives Gary Wang, Caroline Ellison, and Nishad Singh testified against Bankman-Fried, who was convicted on seven charges of fraud and money laundering.

According to the filing, Singh told Fenwick about misuse of customer funds, improper loans, and false statements — and claimed the law firm advised on how to facilitate and hide these acts.

Bankruptcy Examiner Findings: Fenwick “Deeply Intertwined” With FTX

The filing also cites an independent examiner in FTX’s bankruptcy case who reviewed over 200,000 internal documents related to Fenwick.

The examiner allegedly found that Fenwick had:

• Close relationships with FTX’s leadership.

• Facilitated conflicted intercompany transactions misusing customer assets.

• Created shell companies to hide asset movements.

• Implemented auto-deleting messages on Signal between executives.

Customers also claim Fenwick engaged in concealment practices that regulators later cited as obstruction.

Securities Law Violations Added to Complaint

The amended lawsuit adds two new securities claims under Florida and California laws. Customers allege that Fenwick helped design, promote, and sell FTX Token (FTT), yield-bearing accounts, and other unregistered securities tied to the exchange.

Fenwick’s earlier defense argued that a law firm cannot be held liable for a client’s wrongdoing if its actions fall within the scope of legal representation.

Related Cases and Dropped Claims

The customer group also sued Sullivan & Cromwell, another law firm linked to FTX. However, that complaint was dropped due to lack of evidence.

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