According to Bitcoin.com News, on May 24, the Silicon Valley law firm Fenwick & West LLP (the former chief outside counsel to FTX) agreed to pay $54 million to settle the federal class action lawsuits filed by former FTX clients. The settlement agreement has been submitted to the U.S. District Court for the Southern District of Florida and is pending final approval by U.S. District Judge K. Michael Moore.
Settlement Terms: 120-Day Escrow Period and Court Approval Process
Under the agreement terms, the $54 million will be deposited into a third-party escrow account within 120 days after the court’s initial approval. The plaintiffs’ attorneys said the deal is reasonable given the complexity of the litigation and the costs of continuing the lawsuit. The case is part of a multi-district lawsuit called the “FTX Cryptocurrency Exchange Collapse Case” (case number: 1:23-md-03076). Until Judge Moore ultimately signs off, no compensation can be paid to former FTX clients.
Allegations and Fenwick’s Defense Position
The plaintiffs allege that Fenwick & West’s services went far beyond standard legal consultation. They say the firm helped craft strategies that allowed FTX to commingle customer funds and allegedly created “shadow entities” and legal structures to conceal the misuse of customer assets. Fenwick & West fully denies the allegations, saying it had no knowledge of any fraudulent conduct by FTX and that it agreed to settle in order to continue operating normally. Fenwick initially sought to dismiss the lawsuit before it entered settlement negotiations.
Accountability for Professional Services in the FTX Collapse: Total Damages of $66 Million
This settlement is the second wave in the class action litigation stemming from the FTX collapse. Previously, FTX executives including Caroline Ellison, Nishad Singh, and Gary Wang, as well as some celebrity brokers, reached settlements. The audit firm Prager Metis also agreed to pay about $11.75 million, bringing total professional-services compensation to about $66 million. FTX collapsed in November 2022, and founder Sam Bankman-Fried was sentenced in 2024 to 25 years in prison for stealing roughly $8 billion in customer funds.
Washington, D.C.: Another $525 Million Lawsuit Still Ongoing
This $54 million settlement does not resolve all claims against Fenwick. Around 20 FTX victims from multiple countries filed another lawsuit in May 2026 in federal court in the District of Washington, seeking $525 million in damages. The defendants include Fenwick and several of its current and former partners, seeking compensatory damages, the return of litigation fees paid by FTX, and punitive damages.
FAQ
Does the $54 million settlement mean Fenwick admitted wrongdoing?
No. The settlement agreement explicitly does not admit any wrongdoing. Fenwick & West fully denies the allegations, saying it was unaware of any fraudulent conduct involving FTX, and stated that it agreed to settle in order to continue operating normally.
When can former FTX clients receive compensation?
The $54 million must be deposited into a third-party escrow account within 120 days after the court’s initial approval, and final approval is still required by Judge K. Michael Moore. No compensation may be distributed to former FTX clients before Judge Moore’s final signature.
Did this settlement resolve all lawsuits against Fenwick?
Not fully. Another lawsuit filed in May 2026 by about 20 victims in federal court in the District of Washington is still ongoing, with a claim amount of $525 million. The $54 million class settlement does not apply to that lawsuit.
