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Legislation Agency Fenwick Rejects Claims It Helped Allow FTX Collapse

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Fenwick & West, a distinguished Silicon Valley regulation agency, has rejected allegations that it performed a central position within the collapse of crypto alternate FTX, calling the claims “facile” and “flawed” in a courtroom submitting on Monday.

Key Takeaways:

  • Fenwick & West has rejected claims it enabled FTX’s collapse, calling the allegations speculative and flawed.
  • The agency argues it solely offered routine authorized companies and had no data of fraud.
  • Fenwick says the amended lawsuit recycles claims already dismissed in related circumstances, together with these in opposition to Sullivan & Cromwell.

The authorized pushback is available in response to an amended class-action lawsuit filed by FTX prospects earlier this month in a Florida federal courtroom.

Plaintiffs are in search of to replace their 2023 swimsuit, arguing that current revelations from FTX’s chapter proceedings and the legal trial of founder Sam Bankman-Fried counsel Fenwick offered key authorized help that enabled the fraud.

Fenwick Dismisses FTX Allegations as Speculative and Deceptive

In its submitting, Fenwick dismissed the allegations as speculative and deceptive, asserting it merely offered routine authorized companies typical of any outdoors counsel.

“Fenwick isn’t answerable for aiding and abetting a fraud it knew nothing about,” the agency wrote, “primarily based solely on allegations that Fenwick did what regulation companies do daily — present routine and lawful authorized companies to their shoppers.”

The plaintiffs’ broader class-action case additionally contains claims in opposition to celebrities and corporations linked to FTX.

Whereas regulation agency Sullivan & Cromwell was initially named within the case, it was later dropped after a court-appointed examiner discovered no proof the agency had data of the fraud.

Fenwick mentioned the newest grievance recycles related accusations beforehand made in opposition to Sullivan & Cromwell, noting the plaintiffs “supply no credible cause why the identical allegations ought to survive in opposition to Fenwick.”

Fenwick & West requested a Florida federal choose to close down a bid by victims of the notorious FTX cryptocurrency rip-off to deliver new claims in opposition to the agency, calling allegations that it knew about FTX's misuse of buyer funds an "irresponsible falsehood." https://t.co/t9EIIyVHUG pic.twitter.com/51WZNGydli

— Law360 (@Law360) August 27, 2025

Central to the brand new claims is testimony from Nishad Singh, FTX’s former lead engineer, who reportedly mentioned Fenwick’s involvement in structuring loans.

Fenwick countered that Singh didn’t accuse the agency of serving to cowl up misuse of buyer funds. As an alternative, the testimony described normal authorized work on “founder loans,” that are widespread in startups.

Fenwick additionally argued that dozens of witnesses in Bankman-Fried’s legal trial testified to being unaware of the fraud, together with FTX’s inner attorneys, staff, and different exterior advisors, including that “Fenwick is not any completely different.”

Fenwick Rejects Claims It Promoted FTX’s FTT Token

The agency additional criticized new allegations that it helped launch and promote FTT, FTX’s alternate token, as violating Florida and California securities legal guidelines.

Fenwick labeled these claims “frivolous” and “premature,” accusing plaintiffs of submitting them solely after a choose allowed state securities claims to proceed in opposition to movie star endorsers.

“That is an eleventh-hour try to recast attorneys as ‘promoters,’” Fenwick mentioned. “However this principle too goes nowhere.”

The courtroom has but to rule on whether or not the amended grievance shall be accepted.

As reported, FTX has introduced that it’ll start its subsequent spherical of money distributions to collectors on or round September 30, 2025. The file date for eligible claimants was set for August 15.

The funds shall be processed by way of FTX’s designated distribution companions, together with BitGo, Kraken, and Payoneer.

In the meantime, a Chinese language creditor representing over 300 customers is opposing FTX’s proposal to limit payouts in 49 jurisdictions, together with China, arguing it’s legally unfounded and unfair.

The publish Legislation Agency Fenwick Rejects Claims It Helped Allow FTX Collapse appeared first on Cryptonews.

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