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Law Firm Fenwick & West Sued Over Alleged Role in FTX Collapse

Law Firm Fenwick & West Sued Over Alleged Role in FTX Collapse

Complaint alleges firm helped conceal misuse of customer funds.

Written by Rahul Dhingra, Edited by David Delima | Updated: 14 May 2026 18:11 IST

Law Firm Fenwick & West Sued Over Alleged Role in FTX Collapse

Photo Credit: Unsplash/Sasun Bughdaryan

Court complaint accuses firm of aiding concealment of fund misuse

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Highlights

Victims claim FTX collapse wiped out life savings
Complaint cites testimony from former FTX director of engineering
Examiner linked firm to FTX and Alameda structures

One of Silicon Valley's top tech law firms, Fenwick & West LLP, is accused of helping conceal the FTX fraud. The $525 million (roughly Rs. 5,026 crore) lawsuit was filed by a group of 20 victims from five countries or jurisdictions. The complaint was filed in the US District Court for the District of Columbia, naming the firm alongside six individual defendants. The complainants claim that they lost their savings when FTX imploded, and that Fenwick's involvement gave the exchange a false sense of legitimacy and assurance, due to which they did not pull their funds out until it was too late.

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Nishad Singh, FTX's former Director of Engineering, is at the centre of the case due to his testimony, where he pleaded guilty to fraud charges and testified against Sam Bankman-Fried during the trial. The complainants have alleged that Singh stated that Fenwick lawyers were personally informed that customer funds were being misused, to which the firm advised on how to hide it instead of simply walking away.

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The complaint further alleges that Fenwick lawyers set up North Dimension Inc., which posed as a shell company of electronics retailing and managed to funnel over $3 billion (roughly Rs. 28,719 crore) in stolen customer funds. The firm has also been accused of implementing Signal's auto-delete messaging policy, the same system federal prosecutors said helped the fraud go undetected by regulators and investigators.

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Fenwick & West has previously denied wrongdoing in related cases, stating it provided standard legal services.

Earlier this year, former FTX CEO and co-founder Sam Bankman-Fried's plea for a new trial was declined since the witnesses cited were not newly discovered. The former FTX CEO's trial was overseen by Judge Lewis Kaplan in 2023, who wrote in an order on Tuesday that the claim of new evidence and witnesses was baseless. In February, Bankman-Fried had requested a new trial to be overseen by a different judge. On top of that, the motion was reportedly filed without consulting his lawyers, while an appeals court was considering his conviction and sentence.

This lawsuit adds another dimension to the ongoing repercussions from the collapse of FTX. The incident continues to raise questions about accountability across the broader crypto ecosystem. As the legal action moves forward, the case may also take a closer look at the role of external advisers, law firms, and service providers linked to major crypto platforms. The outcome might also impact how professional firms engage with digital asset companies in the future, especially around innovation, compliance, and regulatory oversight.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: Cryptocurrency, FTX collapse, crypto regulation

Rahul Dhingra

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Rahul Dhingra is a crypto writer at Gadgets 360, where he covers the exciting world of Cryptocurrency, Blockchain, Defi and Web3. Before joining Gadgets 360, he worked as a content specialist for a European-based Crypto Exchange. Rahul loves storytelling, not just through the written word but also through the visual medium. Beyond his professional life, Rahul is a sports fanatic. Whether it’s cricket or football, his passion for the game is contagious. More