A group of 20 FTX victims from five countries has filed a $525 million lawsuit against Silicon Valley law firm Fenwick & West LLP, accusing it of actively facilitating the fraud that led to the exchange’s collapse. The complaint, lodged in the US District Court for the District of Columbia, names the firm and six individual attorneys as defendants.
The plaintiffs claim they lost their life savings when FTX failed in November 2022, and argue that Fenwick’s legal work gave the exchange a false appearance of legitimacy that prevented them from withdrawing funds in time. The suit alleges Fenwick did more than provide routine services — it created corporate and operational structures that allowed customer funds to be misused while limiting outside scrutiny.
A key element is the testimony of Nishad Singh, FTX’s former director of engineering, who pleaded guilty to fraud. According to the complaint, Singh told Fenwick attorneys directly that client funds were being misused, but the firm instead advised on ways to conceal the conduct. The lawsuit further claims Fenwick incorporated North Dimension Inc., a Delaware shell company posing as an electronics retailer, which allegedly routed over $3 billion in stolen customer money. The firm is also accused of implementing FTX’s Signal auto-delete messaging policy, which federal prosecutors said helped the fraud escape detection by regulators.
The complaint cites a 2024 report from a court-appointed bankruptcy examiner who reviewed more than 200,000 documents. The examiner found Fenwick was “deeply intertwined in nearly every aspect of FTX Group’s wrongdoing,” having created corporate structures for FTX and Alameda Research, formed shell entities to obscure money movements, and drafted backdated agreements tied to illicit transfers. After FTX’s bankruptcy, Fenwick reportedly removed all references to the exchange from its website and retained defense lawyers from Gibson Dunn before any civil suit was filed.
The plaintiffs bring seven claims including malpractice, fraud, and gross negligence. They seek over $525 million in compensatory damages, the return of all legal fees Fenwick earned from FTX, and punitive damages against partners Tyler Newby and Daniel Friedberg. Separately, Judge Lewis Kaplan recently denied Sam Bankman-Fried’s request for a new trial, calling the arguments “wildly conspiratorial and entirely contradicted by the record.”
