Silicon Valley law firm Fenwick & West LLP has agreed to pay $54 million to settle class-action claims tied to the collapse of crypto exchange FTX Trading Ltd., in one of the largest professional-services settlements to emerge from the sprawling FTX litigation.
The proposed settlement, filed in the U.S. District Court for the Southern District of Florida as part of the multidistrict litigation In re FTX Cryptocurrency Collapse Litigation, stems from allegations that Fenwick provided legal services and strategic advice to FTX entities before the exchange’s dramatic implosion in November 2022.
Under the agreement, Fenwick will deposit $54 million into an escrow account within 120 days after preliminary court approval. The settlement amount will be used for investor compensation, administrative expenses, and any court-approved legal fees.
The plaintiffs accused Fenwick of aiding and abetting fraud, breaches of fiduciary duty, negligence, and conversion, while also asserting claims under federal RICO laws and securities statutes.
The settlement class covers investors who purchased or held crypto or fiat assets on FTX platforms, bought FTT tokens, or participated in yield-bearing accounts offered by the exchange.
Fenwick denied wrongdoing in the agreement and said it entered the settlement to avoid prolonged litigation costs and uncertainty.
The deal is the latest major recovery effort tied to the FTX collapse, which triggered billions of dollars in investor losses and a wave of lawsuits against venture capital firms, auditors, legal advisers, and insiders associated with Sam Bankman-Fried’s crypto empire.
