Michaela
Summary: What is Fenwick & West’s response to the FTX fraud lawsuit?
U.S. law firm Fenwick & West, known for its work with technology and life sciences companies, has rejected claims in an updated class-action lawsuit alleging it played a key role in the collapse of crypto exchange FTX.
In an August 25 court filing, Fenwick & West formally opposed a motion from FTX users seeking to update their lawsuit against the firm. The plaintiffs argued that new details from ongoing bankruptcy and criminal proceedings indicated Fenwick played a central role in facilitating the fraud behind FTX’s collapse. The law firm rejected these claims, maintaining that the allegations misrepresent its involvement.
In the filing, Fenwick & West urged a Florida federal judge to reject FTX users’ request to amend the lawsuit, contending that the allegations of the firm’s involvement in the FTX fraud “are as simplistic as they are misguided.”
Fenwick & West maintained that it cannot be held responsible for aiding a fraud it had no knowledge of, emphasizing that the claims rely solely on the firm performing standard legal services routinely provided to clients.
In early August, FTX users alleged that Fenwick & West had direct knowledge of the FTX fraud, provided “substantial assistance,” and acted as a key participant in the FTX enterprise, violating federal racketeering laws. The plaintiffs also claimed the firm facilitated the sale of “unregistered securities” in breach of Florida and California state laws.
FTX customers further claimed that Fenwick & West knowingly set up, managed, and represented conflicted entities, including Alameda Research and its subsidiary North Dimension, allegedly without implementing safeguards to prevent the misappropriation of billions of dollars.
The latest claims against Fenwick & West arise from a broad class-action lawsuit filed by FTX users after the exchange’s 2022 collapse. The suit also targeted other firms and celebrities, including Sullivan & Cromwell, which was later dropped for lack of evidence.
Fenwick argued the updated complaint relies on outdated information, mirrors dismissed allegations against Sullivan, and offers no credible basis for holding the firm liable. The law firm emphasized that FTX’s lead engineer, Nishad Singh, only confirmed Fenwick advised on standard founder loans, and dozens of trial witnesses testified that FTX’s fraud occurred without the knowledge of its lawyers, executives, or outside counsel.
The court has yet to rule on Fenwick’s motion, leaving the fate of the updated allegations uncertain and emphasizing the ongoing legal ripple effects from FTX’s collapse.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
