FTX Investors Target Fenwick & West as Sole Law Firm in Multidistrict Litigation
Miami, FL – August 11, 2025 – Investors affected by the collapse of cryptocurrency exchange FTX have intensified their legal pursuit, naming Silicon Valley-based law firm Fenwick & West LLP as the sole defendant in a multidistrict litigation (MDL) case centralized in the U.S. District Court for the Southern District of Florida. The lawsuit accuses Fenwick & West of enabling FTX’s alleged multi-billion-dollar fraud by providing legal services that facilitated the exchange’s questionable operations. This development marks a significant shift in the ongoing legal fallout from FTX’s November 2022 bankruptcy, which wiped out over $30 billion in value and left countless investors seeking compensation.
Background of the FTX Collapse
FTX, once a leading crypto exchange, imploded in November 2022 after failing to process a surge of customer withdrawals, revealing a massive financial shortfall. Founder Sam Bankman-Fried was convicted in November 2023 on seven counts of fraud and conspiracy for diverting billions in customer funds to his hedge fund, Alameda Research, and for personal expenditures, including a $500 million purchase of Robinhood shares. Bankman-Fried faces a 25-year prison sentence, with appeals ongoing, and is scheduled for additional criminal trials in 2025 on charges like illegal campaign finance violations.
Fenwick & West’s Alleged Role
The MDL, led by attorneys Adam Moskowitz of The Moskowitz Law Firm and David Boies of Boies Schiller Flexner, consolidates claims from FTX customers who allege Fenwick & West played a pivotal role in the exchange’s fraudulent activities. Key accusations include:
- Creating “Shadowy Entities”: The lawsuit claims Fenwick & West set up entities like North Dimension and North Wireless Dimension, which allegedly siphoned misappropriated customer funds. These entities enabled FTX to commingle customer deposits with Alameda Research’s assets for speculative trading, venture investments, and personal transactions by insiders like Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh.
- Aiding and Abetting Fraud: Investors allege Fenwick & West went beyond standard legal services, structuring acquisitions to evade regulatory scrutiny and drafting agreements that concealed FTX’s improper handling of funds. A January 2021 email from former FTX chief compliance officer Dan Friedberg, a former Fenwick partner, reportedly disclosed that Alameda held FTX customer funds, with Fenwick assisting in justifying this arrangement through intercompany lending agreements.
- Comprehensive Involvement: A court-appointed examiner’s report by former prosecutor Robert J. Cleary, made public in May 2024, stated that Fenwick & West was the only firm “entrusted with a bird’s-eye view” of FTX’s operations. The firm earned $22 million for its work, which included blurring ties between FTX and Alameda and facilitating “founder loans” that moved at least $2 billion among FTX entities and insiders’ personal accounts.
- Legal Violations: The suit alleges Fenwick engaged in civil conspiracy, facilitated a racketeering enterprise under the Racketeer Influenced and Corrupt Organizations Act (RICO), and aided negligence, breach of fiduciary duty, and conversion.
Fenwick & West’s Defense
Fenwick & West, represented by Gibson, Dunn & Crutcher and Gunster, Yoakley & Stewart, filed a motion to dismiss the lawsuit in September 2023, arguing that its services were “routine” and lawful, including forming corporations, structuring acquisitions, and advising on regulatory compliance. The firm denies knowledge of FTX’s fraudulent activities, asserting that holding lawyers liable for clients’ misconduct contradicts legal principles. Fenwick emphasized that the Friedberg email was selectively quoted and involved a legitimate query about intercompany agreements, which it advised FTX to disclose publicly. The firm also clarified that its client was FTX, not individual insiders like Bankman-Fried, complicating any reliance-on-counsel defense in his criminal case.
A Fenwick spokesperson told The Wall Street Journal, “The examiner’s report did not include any finding of wrongdoing on Fenwick’s part,” and the firm stands by the integrity of its work.
Why Fenwick & West is the Sole MDL Defendant
The decision to focus solely on Fenwick & West in the MDL stems from strategic legal refinement by plaintiffs. Initially, lawsuits targeted multiple parties, including FTX’s banks, auditors, venture capital firms like Sequoia Capital, and celebrity endorsers. However, a February 2023 class-action suit and Cleary’s report highlighted Fenwick’s unique role due to its deep involvement in FTX’s operations. Unlike Sullivan & Cromwell, FTX’s bankruptcy counsel, which was largely cleared of wrongdoing by Cleary, Fenwick’s “bird’s-eye view” and alleged facilitation of fraudulent structures made it the primary target.
The MDL, centralized in Florida, consolidates claims from investors like Leandro Cabo, Ryan Henderson, and others, seeking compensation for losses in what plaintiffs describe as “the largest financial fraud in U.S. history.” X posts from August 11, 2025, by @lawdotcom, @dbreview, and @CourtNewsNet reflect the focus on Fenwick, noting the MDL’s streamlined approach to hold the firm accountable.
Implications and Challenges
- For Investors: The MDL offers a critical avenue for recovery, as FTX’s bankruptcy proceedings may take years with uncertain payouts. However, proving Fenwick’s knowledge of fraud is challenging, requiring evidence like the Friedberg email to establish intent or negligence.
- For Fenwick & West: The firm faces reputational damage and potential financial liability, despite its defense of providing “indisputably lawful” services. Its hiring of Gibson Dunn for legal support underscores the high stakes.
- For the Legal Industry: The case raises questions about the liability of law firms in client misconduct, potentially setting a precedent for how far legal responsibility extends in complex financial schemes.
What’s Next?
The MDL is ongoing, with no set trial date as of August 11, 2025. Fenwick’s motion to dismiss remains under consideration, and discovery is expected to intensify, focusing on internal communications and the firm’s role in FTX’s corporate structure. Federal law enforcement subpoenas targeting Fenwick, reported by Bloomberg Law, suggest parallel investigations may influence the case. Meanwhile, Bankman-Fried’s criminal trials in 2025 could shed further light on Fenwick’s involvement, though attorney-client privilege may limit disclosures.
For NRIs and global investors affected by FTX’s collapse, joining the MDL or similar actions requires coordination with U.S.-based counsel, with claims potentially payable through Indian bank accounts in INR to avoid forex issues. Legal fees and recovery timelines remain uncertain, underscoring the complexity of seeking redress.
Conclusion
By targeting Fenwick & West as the sole MDL defendant, FTX investors are focusing on the law firm’s alleged role in enabling one of the largest financial frauds in history. The lawsuit highlights Fenwick’s deep involvement in FTX’s operations, from creating “shadowy entities” to facilitating questionable financial maneuvers. While Fenwick defends its services as routine, the MDL’s outcome could reshape how law firms navigate liability in high-stakes corporate misconduct cases. As the legal battle unfolds, investors and the industry await clarity on accountability and compensation in the wake of FTX’s catastrophic collapse.
Sources: This article draws on information from LegalNewsFeed (), Bloomberg Law (,,), ABA Journal (,), Cointelegraph (,), BeInCrypto (), Cryptonews (), Nasdaq/Reuters (), DailyCoin (), Securities Docket (), and X posts (,,).