FTX users bolster lawsuit claiming law firm was ‘key’ to FTX fraud

Key Points

1. FTX customers claim Fenwick & West was instrumental in enabling the fraud by providing legal services to FTX and its affiliated entities, such as Alameda Research and North Dimension, which lacked safeguards against theft.

2. The lawsuit cites testimony from FTX insiders, including co-founder Gary Wang and former Alameda CEO Caroline Ellison, who pleaded guilty and testified against Sam Bankman-Fried.

3. An independent examiner in FTX's bankruptcy case reviewed over 200,000 documents and found Fenwick had 'exceptionally close relationships' with FTX executives and facilitated conflicted transactions.

4. Fenwick & West is accused of creating shell companies and misleading investors and regulators through its actions, including designing and promoting FTX's financial products like FTT and yield-bearing accounts.

5. The lawsuit is part of a larger multi-district class-action involving FTX, its promoters, and other companies associated with the exchange, originally filed in August 2023.