The law firm that advised FTX before its collapse will pay $54 million to former customers of the platform.
Fenwick & West LLP, the law firm that served as FTX’s primary legal counsel, has agreed to pay $54 million to settle a 2023 class action lawsuit filed by former customers of the defunct exchange. The settlement, reached in February 2026, was announced on Friday and still requires approval from a U.S. judge.
The plaintiffs allege that Fenwick “facilitated FTX’s fraud” by playing “a key and crucial role in the most important aspects of why and how FTX’s fraud was carried out”, as stated in the original complaint. Specifically, the claimants accuse the Silicon Valley-based firm of helping FTX conceal the misuse of customer funds through the creation of legal entities, structures, and strategies designed to hide the commingling of funds — including transfers between the exchange and its trading arm, Alameda Research.
Among the contested strategies is legal advice provided by Fenwick to create structures that exempted FTX from the requirement to obtain licenses as a money transmission operator. The firm had initially attempted to have the case dismissed before agreeing to negotiate a settlement. The case is part of the broader legal fallout following FTX’s collapse in 2022, which shook the entire crypto industry and paved the way for increased regulatory scrutiny in the United States. Fenwick & West also faces a separate lawsuit seeking $525 million over its alleged role in the platform’s downfall.
On the creditor and customer reimbursement front, the FTX Recovery Trust distributed $2.2 billion in March 2026, with a new tranche of payments scheduled for May 29. However, those affected have complained that the Trust mismanaged the liquidation of assets, frequently selling them at discounted prices relative to the all-time highs reached after the collapse. One striking example: the Trust sold a 5% stake in artificial intelligence company Cursor for approximately $200,000 in April 2023, missing out on an extraordinary gain when that same stake reached a value of approximately $3 billion in April 2026.
