A group of 20 victims from five countries has filed a $525 million lawsuit against Fenwick & West LLP, a top Silicon Valley law firm, accusing it of helping conceal the FTX fraud.
The complaint was filed Wednesday in the US District Court for the District of Columbia. Plaintiffs say they lost their life savings when FTX collapsed, claiming Fenwick's involvement gave the exchange a false air of legitimacy.
Nishad Singh, FTX's former director of engineering who pleaded guilty to fraud, testified that he told Fenwick attorneys customer funds were being misused. Instead of walking away, the firm advised on how to hide it. The complaint alleges Fenwick set up a Delaware shell company that funneled over $3 billion in stolen funds and implemented FTX's auto-delete messaging policy.
A court-appointed bankruptcy examiner found Fenwick created corporate structures for FTX and Alameda Research, formed shell entities to obscure money movements, and drafted backdated agreements. The examiner concluded the firm was deeply intertwined in FTX's wrongdoing.
After FTX filed for bankruptcy, Fenwick removed all mentions of the exchange from its website and hired defense lawyers from Gibson Dunn. The plaintiffs seek $525 million, return of legal fees, and punitive damages.
Last month, a federal judge denied Sam Bankman-Fried's bid for a new trial, calling his claims baseless. Bankman-Fried was sentenced to 25 years in prison in 2024.