Customers of the now-defunct cryptocurrency exchange FTX have filed an amended lawsuit against their former legal advice firm Fenwick & West, claiming new information supports the firm's involvement in FTX’s financial misconduct.
Update on FTX Customer Lawsuit
On August 11, an amended filing was submitted in court by FTX customers, alleging that evidence from the trial of Sam Bankman-Fried and FTX’s bankruptcy proceedings shows Fenwick was deeply involved in the key aspects that facilitated the FTX fraud.
Allegations Against Fenwick & West
Customers claim Fenwick provided 'substantial assistance' to FTX by designing and endorsing corporate arrangements that allowed billions in customer funds to be siphoned off. They accuse the firm of representing 'conflicted companies' related to FTX, such as trading firm Alameda Research, which they argue lacked safeguards to prevent asset misuse.
Fenwick & West's Role in Legal Proceedings
Witnesses, including former FTX executives, testified that Fenwick was aware of improper loans and false statements. Findings from an independent examiner in the FTX bankruptcy also suggest that the firm had 'exceptionally close relationships' with FTX leadership, being deeply intertwined in various wrongful acts. The amended filing introduces new claims under Florida and California securities laws concerning Fenwick's role in FTX Token sales.
The amended lawsuit by FTX customers reveals new allegations against Fenwick & West, highlighting the complex legal and financial aspects behind the exchange’s collapse. The progression of the lawsuit will be closely monitored by both victims and legal experts.
