FTX investors reportedly filed an amended class-action lawsuit against Silicon Valley law firm Fenwick & West, alleging the firm played a central role in enabling Sam Bankman-Fried’s (SBF) $8 billion fraud that led to the crypto exchange’s collapse in November 2022.
The lawsuit is based on accusations that Fenwick & West is “deeply intertwined in nearly every aspect” of FTX’s collapse, and that the firm enabled Sam Bankman-Fried’s fraud and helped design it.
Fenwick & West gets hit with a lawsuit
The lawsuit is part of a multidistrict litigation involving over 130 law firms that had business dealings with FTX. However, Fenwick & West was singled out and stands as the only firm facing fraud charges in the dedicated “Law Firm Track.”
The plaintiff now claims to be able to prove that the law firm was aware of the fraud and even provided “substantial assistance” that facilitated the multi-billion-dollar scheme.
The lawsuit is an attempt to hold a major law firm liable under federal racketeering (RICO) laws for the role they played in client fraud, rather than providing bad legal advice.
Investors have alleged the firm was behind the corporate structures that helped former FTX CEO Sam Bankman-Fried and insiders steal hundreds of millions in customer funds via sham “loans.”
However, legal commentators cautioned that proving law firm culpability will require more than extensive client engagement.
The lawsuit comes as FTX distributions proceed
The Fenwick lawsuit comes after similar legal action was taken against law firm Sullivan & Cromwell last year. The firm was accused of billing $8.5 million in fees while serving as primary counsel in the 16 months preceding FTX’s collapse.
Both firms are now accused of enabling Sam Bankman-Fried’s fraud scheme that commingled customer assets with Alameda Research’s trading operations.
The filing is also happening as FTX continues its distribution process, having repaid $6.2 billion to creditors across two major payment rounds since February 2025.
The exchange is now looking to dispute claims from 49 restricted jurisdictions worth $800 million, with Chinese users accounting for 82% of the disputed value despite representing only 5% of allowed claims.
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