Fenwick & West LLP, the Silicon Valley law firm that advised the now-defunct cryptocurrency exchange FTX, has agreed to pay $54 million to resolve a 2023 class-action lawsuit brought by former customers of the exchange.
The plaintiffs accused Fenwick of playing a central role in enabling the alleged FTX fraud. According to their complaint, the firm helped design legal entities, corporate structures and operational strategies that obscured the misuse and commingling of customer funds, including transfers between FTX and its affiliated trading firm, Alameda Research. The suit also claims the firm advised on structures that reduced the exchange’s need to obtain money transmitter licenses.
Fenwick initially sought dismissal of the case but reached the settlement in February. The agreement remains subject to approval by a U.S. judge before it becomes final.
This settlement is one of several legal developments stemming from FTX’s collapse in 2022, an event that triggered intense regulatory and public scrutiny across the crypto industry and spawned multiple lawsuits and recovery efforts.
Separately, the FTX Recovery Trust, which manages the distribution of recovered assets to former customers and creditors, distributed $2.2 billion in March and has another payout tranche scheduled for May 29. Some creditors and customers have criticized the Trust’s handling of asset sales, saying assets were sold at steep discounts or below values achieved after the exchange’s collapse.
A frequently cited example is the Trust’s April 2023 sale of a roughly 5% stake in AI company Cursor for about $200,000; that stake was later valued at roughly $3 billion in April 2026, a discrepancy that drew scrutiny and complaints from affected parties.
The $54 million settlement with Fenwick & West adds to the broader effort to hold advisors and operators accountable and to maximize recoveries for those who lost funds when FTX failed. The settlement’s approval by the court and any potential impacts on other related claims or recoveries will become clearer as the case proceeds.