Why is Fenwick & West paying $54 million over FTX?

Fenwick & West agreed to pay $54 million to settle claims from former FTX customers who alleged the firm helped facilitate fraud at the collapsed crypto exchange. The settlement still requires approval from a US judge.

What did plaintiffs accuse Fenwick & West of doing for FTX?

Plaintiffs claimed the law firm helped create legal and corporate structures that obscured the misuse of customer funds between FTX and Alameda Research. The lawsuit also alleged Fenwick advised on structures that reduced licensing requirements.

Did Fenwick & West admit wrongdoing in the FTX settlement?

The article does not state that Fenwick admitted wrongdoing. The firm initially tried to dismiss the case before later agreeing to settle with plaintiffs in February 2026.

Why is this settlement important for the crypto industry?

The settlement highlights how legal advisers, auditors and service providers connected to crypto firms may face liability after major collapses. It also shows regulators and investors continue scrutinising professional firms tied to failed crypto businesses.

What role did Alameda Research play in the FTX collapse?

Alameda Research was FTX’s affiliated trading company and became central to allegations that customer funds were improperly transferred and commingled between the two entities.

Is Fenwick & West facing more legal risk beyond this settlement?

Yes. The law firm is also facing a separate $525 million lawsuit related to its advisory role for FTX, increasing its broader legal exposure connected to the exchange’s collapse.

How much money has the FTX Recovery Trust repaid to creditors?

The FTX Recovery Trust distributed about $2.2 billion to creditors and former customers in March. Another round of repayments is reportedly scheduled for May 29.

Why are some FTX creditors unhappy with the recovery process?

Some creditors argue the Recovery Trust sold valuable assets too early and at deep discounts instead of holding them longer. Critics believe this reduced potential recoveries for former customers.

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Fenwick settles FTX lawsuit for $54M

Written by Mahathir BayenaPublished May. 25 2026Last Updated May. 25 2026

Fenwick & West agreed to pay $54 million to settle a class action lawsuit brought by former customers of collapsed crypto exchange FTX over its legal work for the company.

Plaintiffs alleged the law firm played a “key and crucial role” in facilitating the fraud at FTX by helping create legal structures that obscured the misuse and commingling of customer funds with trading affiliate Alameda Research.

The lawsuit also claimed Fenwick advised FTX on corporate structures designed to avoid certain money transmitter licensing requirements while enabling transfers between the exchange and Alameda.

Fenwick initially attempted to have the case dismissed before agreeing to settle with plaintiffs in February 2026, although the agreement still requires approval from a US judge.

The settlement marks another major development in the continuing legal fallout from FTX’s 2022 collapse, which triggered widespread losses across the crypto industry and intensified regulatory scrutiny of digital asset firms in the United States.

Fenwick is also facing a separate $525 million lawsuit connected to its role advising FTX, adding to mounting legal exposure tied to the exchange’s failure.

Meanwhile, the FTX Recovery Trust distributed $2.2 billion to former creditors and customers in March and plans another round of repayments on May 29, although some creditors argue recovered assets were sold too early and at deep discounts.

Criticism intensified after reports that the Trust sold a 5% stake in AI company Cursor for about $200,000 in 2023, despite the stake later being valued at roughly $3 billion in April 2026.