Did This Law Firm Help FTX Collapse? Investors Think So, but the Company Fights Back

Fintech

A new push to link Fenwick & West to the downfall of FTX has been met with strong resistance from the Silicon Valley law firm.

In a filing submitted to a Florida federal court this week, Fenwick dismissed the latest claims as unfounded, repetitive, and filed far too late.

Investors Revive Lawsuit

The dispute traces back to a class-action case launched after FTX imploded in late 2022. Earlier this month, plaintiffs asked the court for permission to amend their complaint, arguing that information revealed through bankruptcy proceedings and the trial of Sam Bankman-Fried shows Fenwick was more deeply involved in the exchange’s fraudulent practices than previously believed.

Their legal team described Fenwick as “central” to how the scheme was carried out.

Law Firm Calls Claims Baseless

Fenwick’s response was blunt: advising a client on corporate matters does not amount to enabling fraud. The firm said it had no knowledge of wrongdoing and compared the accusations to the failed attempt by the same group to pin liability on Sullivan & Cromwell — another law firm later cleared by independent reports.

“These are recycled theories that already collapsed once before,” Fenwick argued, adding that the plaintiffs are “grasping for defendants” after their claims against celebrities promoting FTX were mostly dismissed.

Disputed Testimony

One of the more striking allegations centers on testimony from Nishad Singh, FTX’s former engineering chief. Plaintiffs suggested Singh told jurors Fenwick helped disguise improper loans and misuse of customer assets. Fenwick insists that interpretation is misleading, saying Singh merely confirmed the firm gave legal advice on structuring founder loans, a routine practice in closely held companies.

Securities Allegations Labeled “Frivolous”

The plaintiffs also introduced new securities law claims, alleging Fenwick assisted in promoting the FTX Token (FTT) in violation of state laws. Fenwick countered that these accusations were “frivolous” and should have been raised years earlier if they had any merit.

High-Stakes Battle Over Accountability

The clash underscores the broader effort by FTX victims to widen the pool of defendants and recover losses from one of the most spectacular collapses in crypto history. Fenwick maintains it is being unfairly cast in the role of promoter and facilitator when, in its view, it merely performed standard legal work.

Whether the court allows the updated complaint could determine if Fenwick joins the long list of firms, investors, and celebrities still battling fallout from FTX’s implosion.

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Author

Alexander Zdravkov is a person who always looks for the logic behind things. He is fluent in German and has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.