{"id":41864,"date":"2025-08-13T05:01:53","date_gmt":"2025-08-13T05:01:53","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=41864"},"modified":"2025-08-13T05:01:53","modified_gmt":"2025-08-13T05:01:53","slug":"ftx-customers-claim-law-firm-had-key-role-in-crypto-exchanges-fraud-details","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=41864","title":{"rendered":"FTX Customers Claim Law Firm Had \u2018Key\u2019 Role In Crypto Exchange\u2019s Fraud \u2013 Details"},"content":{"rendered":"
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In a new legal development, FTX customers claim that law firm Fenwick & West was a \u201ckey\u201d player in the multi-billion-dollar fraud, alleging that the Silicon Valley firm was intertwined in many aspects of the crypto exchange\u2019s operations.<\/p>\n

Customers Amend FTX Law Firm Track Complaint<\/h2>\n

On Monday, FTX customers filed<\/a> a motion to amend their complaint against Silicon Valley law firm Fenwick & West, claiming that it played a central role in the crypto exchange\u2019s fraud before its collapse in 2022.<\/p>\n

The filing, which is part of a multi-district litigation (MDL), follows the June 2023 complaint<\/a> that alleged the law firm exceeded the norm in its services provided to the crypto exchange and that it could be liable for \u201cconspiring in, and aiding and abetting, Bankman-Fried\u2019s purported fraud, negligence, fiduciary breach and conversion of customer funds.\u201d<\/p>\n

Notably, the law firm denied<\/a> the claims in September 2023 with a motion to dismiss the lawsuit, arguing that each of the eight claims should be dismissed with prejudice because Plaintiffs \u201chave failed to plausibly allege any of those claims,\u201d and \u201care unable to amend their Complaint to state a valid claim for relief.\u201d<\/p>\n

Nonetheless, the FTX users consider the amended complaint to be \u201cextremely unique\u201d as the District Court for the Southern District of Florida has the \u201cadvantage\u201d of reviewing<\/a> all the completed related investigations over the past 2 and a half years:<\/p>\n

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This is the first substantive amendment to the FTX Law Firm Track complaint. In the nearly two years that have transpired since Plaintiffs filed this MDL, much has transpired outside of this litigation that highlights that Plaintiffs\u2019 claims here are meritorious, and they could even be considered \u201cprevailing parties\u201d at this stage. Rather than press forward with the original Complaint filed two years ago, Plaintiffs seek to streamline issues in this MDL: Law Firm Track. This MDL Track will now proceed with just one Defendant, Fenwick & West.<\/p>\n<\/blockquote>\n

In the proposed amended complaint, the crypto exchange\u2019s customers requested that the Court enter an order granting leave to amend their complaint to address these new facts and deny the Motion to Dismiss as moot.<\/p>\n

Fenwick Accused Of Crucial Role In Fraud<\/h2>\n

The 220-page document explains that out of the 130 different law firms that offered services to the crypto exchange, only Fenwick is named in the MDL because the FTX Independent Examiner concluded that the firm was deeply intertwined<\/a> in \u201cnearly every aspect\u201d of the crypto company\u2019s fraud and wrongdoing.<\/p>\n

\"FTX<\/p>\n

According to the filing, the firm had \u201cactual knowledge\u201d of the crypto exchange\u2019s fraud and provided \u201csubstantial assistance.\u201d Additionally, Fenwick, in violation of federal racketeering laws, allegedly served as an \u201cessential member\u201d of the FTX enterprises and promoted the sale of \u201cunregistered securities,\u201d in violation of the Florida (FSIPA) and California Laws (CSL).<\/p>\n

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The FTX Fraud was only possible <\/em><\/strong>because Fenwick provided \u201csubstantial assistance\u201d by creating and approving the structures that allowed numerous frauds, including the theft of hundreds of millions of dollars in \u201cloans\u201d by convicted FTX Insiders from the injured class, and Fenwick agreed to create, managed and represented clearly conflicted companies (such as Alameda Research, FTX, North Dimension, etc.), which purposefully had no safeguards to prevent the billions of dollars that were admittedly stolen.<\/p>\n<\/blockquote>\n

The Plaintiffs highlighted that the evidence from SBF\u2019s trial shows<\/a> that FTX insiders needed the law firm\u2019s backing and representation, as well as the ability to use the \u201cgreat Fenwick name\u201d on all related promotions to gain instant credibility on their targeted customer class and help the crypto exchange \u201clocate and obtain billions of dollars in venture capital investments.\u201d Moreover, the law firm also allegedly helped satisfy all concerns by state and federal tax and securities regulators.<\/p>\n

Ultimately, the amended complaint alleges that at best, Fenwick committed professional negligence that directly caused billions of dollars in damages, and at worst was a \u201ckey and crucial\u201d player in the crypto exchange\u2019s fraud.<\/p>\n

\"ftx,<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In a new legal development, FTX customers claim that law firm Fenwick & West was a \u201ckey\u201d player in the multi-billion-dollar fraud, alleging that the Silicon Valley firm was intertwined in many aspects of the crypto exchange\u2019s operations. Customers Amend FTX Law Firm Track Complaint On Monday, FTX customers filed a motion to amend their […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-41864","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/41864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41864"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/41864\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}