- Former FTX customers are seeking to update their lawsuit against Fenwick & West, alleging the law firm played a crucial role in enabling the FTX fraud.
- New evidence from Sam Bankman-Fried’s trial suggests Fenwick assisted in structuring key aspects of the company’s misconduct and creating companies lacking safeguards.
- The court-appointed examiner in FTX’s bankruptcy found Fenwick was “deeply intertwined” in FTX operations and helped set up practices that obscured asset movement.
- The amended complaint includes new allegations that Fenwick violated securities laws in Florida and California regarding FTX’s cryptocurrency offerings.
- Fenwick & West denies the accusations and has filed to dismiss previous claims, stating their actions were within the scope of legal representation.
FTX customers have moved to amend their class-action lawsuit against law firm Fenwick & West, saying new details reveal the firm’s central role in the exchange’s collapse. The filing, made Monday in U.S. court, claims fresh evidence from Sam Bankman-Fried’s criminal trial and FTX’s bankruptcy proceedings shows Fenwick was a key player in events leading to FTX’s 2022 downfall.
The complaint points to information disclosed during Bankman-Fried’s trial, including testimony from ex-FTX executives, and findings from a bankruptcy court examiner. The FTX customer group alleges that Fenwick provided “substantial assistance” by designing structures and managing companies linked to the fraud—including FTX’s sister trading firm Alameda Research and a subsidiary called North Dimension, which lacked customer asset protections.
According to court documents, an internal examiner who reviewed over 200,000 files connected to FTX concluded that Fenwick had an “exceptionally close relationship” with FTX’s leaders. The examiner also said Fenwick helped create shell companies to hide the movement of assets and implemented encrypted messaging tools with auto-deletion for FTX executives, a practice cited as obstructive by U.S. regulators and prosecutors.
The group’s amended lawsuit now adds accusations that Fenwick violated securities laws in Florida and California related to FTX Token (FTT) and other crypto instruments. They claim Fenwick played “an active role in designing, promoting, and facilitating the sale” of unregistered crypto securities.
In a previous response, Fenwick & West moved to dismiss the allegations, arguing it cannot be held liable for a client’s wrongdoing as long as its actions were within its legal representation scope. The complaint also notes that a similar lawsuit against another FTX law firm, Sullivan & Cromwell, was dropped due to insufficient evidence.
Further details and accusations are available in the full filing provided on CourtListener.
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