Fenwick & West agrees to pay $54M to escape FTX customer lawsuits over collapse

Fenwick & West, a prominent Silicon Valley law firm, has entered into a $54 million preliminary settlement agreement to address customer lawsuits related to the defunct crypto exchange, FTX. Filed in court on Friday in Miami, Florida, the settlement has yet to receive judicial sanction.

Settlement will address claims that FTX clients raised against the Fenwick & West law firm. In particular, plaintiffs have alleged the law firm played a vital role in facilitating FTX’s operations before it failed.

Fenwick & West. bend the knee to defrauded clients

According to reports, Fenwick & West will settle for $54 million while not admitting any responsibility for its actions. Attorneys representing the plaintiffs, such as David Boies, considered the amount fair since they would avoid the troubles associated with a drawn-out process.

According to the agreement, the company would deposit $54 million into an escrow account within 120 days of initial judicial approval. The money would be used to pay investors’ claims, cover administrative expenses, and cover approved attorneys’ fees.

As reported by Cryptopolitan, the lawsuit accused Fenwick of facilitating the creation of highly complex corporate structures that made it difficult to determine whether funds were FTX’s or those of its sister trading platform, Alameda Research. 

According to the lawyers, the law firm assisted in tricky areas of money transmitter licenses, fund transfers, and compliance procedures, enabling the funds of FTX customers to be moved at will, including to cover losses incurred by the trading platform. 

Plaintiffs argued that the legal services of Fenwick Law made it possible to set up “shadowy entities.” The lawsuit against Fenwick Law was filed in 2025.

In addition to the above case, there was another but distinct lawsuit that was filed on May 13, 2026, in the Federal Court of Washington, D.C., involving 20 people from five different countries who were seeking more than $525 million as compensation. Seven current or former Fenwick partners, as well as John Does, were listed as defendants in this lawsuit as well.

Both parties have agreed to suspend all deadlines and motions until the settlement is sorted out. According to the plaintiffs’ attorneys, including the law firm of Moskowitz, the deal was practical because it helped them avoid litigation costs. 

Fenwick stated that it was unaware of any fraud at FTX and reiterated the firm’s commitment to adhering to the letter of the law. The firm also noted that it ceased representing the company upon its bankruptcy filing.

Ex-FTX exec launches ‘No-Loss’ AI trading platform

Since the collapse of FTX, its executives have taken different paths. Sam Bankman-Fried is serving 25 years in federal prison. With good behavior, time credits, and other federal reductions, he could potentially serve around 12–18 years.

Caroline Ellison was sentenced to two years in prison but was released from federal custody at the start of 2026. 

Now, another official is banking on the trust of the same crypto traders to get his business into the broader market. Former head of Europe for FTX, Patrick Gruhn, has launched a new trading platform powered by AI and assures users’ profitability even without investing their personal capital. 

He has launched UpsideOnly through Perpetuals.com Ltd. as a platform that combines crowdsourced market predictions with proprietary AI to run trades using only the company’s funds.

How does the platform work? By letting users place a paper trade simulating their predictions of price changes in assets, including stocks, commodities (such as oil and gold), crypto, and forex. The company’s in-house AI algorithm, BayesShield, analyses these trading signals based on patterns it identifies in more than a billion historical trades. 

The most profitable strategy is identified by the system and implemented using Perpetuals’ money. When these trades bring money for the company, 50% of the profit is shared with the user community.

Gruhn, appointed as CEO of Perpetuals in 2023, was influenced by his experience at FTX Europe, where he realized that retail traders kept losing their money through risky bets.

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