FTX Users and Fenwick Reach Proposed Settlement Over Fraud Allegations
By John Nada·Feb 3, 2026·2 min read
FTX users and Fenwick & West have proposed a settlement over the firm's alleged role in FTX's fraud. The settlement filing is set for court approval on February 27.
FTX users and the law firm Fenwick & West have proposed a settlement regarding allegations of the firm’s involvement in the fraud that led to the crypto exchange’s collapse. According to Cointelegraph, this proposed settlement comes after a lawsuit filed in 2023 accused Fenwick of playing a key role in how the FTX fraud was accomplished. The joint filing to a Florida federal court indicated that both parties plan to seek court approval for the settlement on February 27. Specific terms of the settlement were not disclosed, but both sides requested a pause on all deadlines and pending motions in the class-action lawsuit ahead of the filing.
The lawsuit, part of a multidistrict class action initiated after FTX's collapse in late 2022, claimed that Fenwick provided substantial assistance by creating and approving structures that enabled numerous fraudulent activities. Plaintiffs alleged that Fenwick advised FTX on structuring its business to avoid necessary money transmitter registrations and had visibility into the commingling of funds between FTX and Alameda Research.
Fenwick had previously sought to dismiss the lawsuit, arguing it was not liable for aiding fraud that it claimed to know nothing about and maintained it provided only routine legal services. However, the court allowed the amended complaint from FTX users to proceed, denying Fenwick’s motion to dismiss.
Additionally, FTX users had previously sued Sullivan & Cromwell, FTX’s former outside counsel, in February 2024, accusing it of involvement in the multibillion-dollar fraud but later dismissed that complaint due to insufficient evidence. The legal proceedings surrounding FTX continue to evolve, indicating a complex aftermath of the exchange's downfall.
This proposed settlement marks a significant step in resolving the ongoing legal issues stemming from FTX’s collapse. The outcome may set a precedent for how similar cases are handled in the future, highlighting the intricate relationships between legal counsel and their clients within the crypto space.