A prominent Silicon Valley law firm, Fenwick & West, is facing a lawsuit filled on August 11, 2025, alleging a major role in the collapse of the cryptocurrency exchange, FTX. The lawsuit claims the firm not only provided poor legal advice but also actively assisted FTX’s former CEO, Sam Bankman-Fried, in executing a massive fraud.
While the fraud resulted in billions of dollars being lost by investors, as per the filing, the lawsuit is part of a larger legal case involving over 130 law firms. However, Fenwick & West is the only one facing fraud charges in a special “Law Firm Track.”
Investors have claimed that Fenwick knew about the fraud and provided significant help by setting up shell companies such as North Dimension, a subsidiary of Alameda Research, the crypto hedge fund and trading firm also founded by Bankman-Fried. It concealed the misappropriation of customer funds by FTX, evading government supervision.
The lawsuit against Fenwick & West uses RICO laws, which are usually for crimes like those committed by organized crime groups, to claim the law firm didn’t just give regular legal advice but actively helped FTX’s fraud.
In November 2022, the crypto exchange FTX collapsed after it was revealed that customer funds were misused to cover losses at another company owned by Sam Bankman-Fried. Legal experts say it’s difficult to prove that Fenwick & West is responsible for illegal use of customer money. They said that there must be clear evidence.
They need clear proof that the firm knew about the illegal acts and deliberately helped make them happen, not just did normal legal work. An independent examiner reviewing the FTX bankruptcy, who analyzed over 200,000 documents, found that Fenwick had “exceptionally close” ties to FTX insiders and facilitated the misuse of customer funds in transactions.
Former FTX executive Nishad Singh testified that he informed Fenwick of customer fund misuse, and the firm advised on concealing it. Caroline Ellison, former head of Alameda Research, admitted that FTX, a cryptocurrency exchange, misused customer funds to pay off debts for Alameda.
Investors are suing the law firm Fenwick & West, claiming its respected reputation helped FTX gain trust and raise $1.3 billion. The lawsuit alleges that the firm was aware of FTX’s imminent financial collapse.
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