Former FTX Legal Adviser 'Fenwick & West' Requests Dismissal of Investor Lawsuit

Fenwick & West, the U.S. law firm that served as legal counsel to cryptocurrency exchange FTX, has asked the court to dismiss a lawsuit alleging that it is responsible for the collapse of FTX.

On the 28th (local time), according to Decrypt, Fenwick said, "Two years have passed since the lawsuit was filed, but the plaintiffs have not proven that Fenwick knew of FTX's fraudulent conduct," and added, "We merely provided routine legal services."

The lawsuit was filed in 2023, and investors are challenging whether Fenwick and numerous other defendants connected to the FTX affair were aware of any fraud. The defendant list includes Binance, the Federal Deposit Insurance Corporation (FDIC), model Gisele Bündchen and her ex-husband and NFL star Tom Brady, venture investor Kevin O'Leary, and tennis player Naomi Osaka.

Fenwick stated that "the plaintiffs' claims are superficial and defective," arguing, "Fenwick knew nothing of any fraud and only provided ordinary legal counsel, yet is being blamed."

FTX collapsed in 2022 after it was revealed that customer funds and company-issued token FTT, as well as Robinhood shares, had been used to support affiliate Alameda Research. Subsequently, founder Sam Bankman-Fried (SBF), the former chief executive officer (CEO), was sentenced to 25 years in prison, and former Alameda Research CEO Caroline Ellison was sentenced to 2 years in prison as part of a guilty plea deal.

An independent examiner overseeing FTX's bankruptcy reported, after reviewing hundreds of thousands of internal documents, that "Fenwick maintained close ties with FTX management and was deeply involved in company operations." However, in its dismissal motion Fenwick countered that "the investors' claims are merely a verbatim restatement of the report concerning another FTX adviser, Sullivan & Cromwell."

Fenwick added, "The plaintiffs previously pursued similar claims against Sullivan & Cromwell with vigor and then abruptly withdrew the suit," saying, "This lawsuit also lacks merit."