Fenwick & West, the Silicon Valley law firm that served as FTX US’s principal outside counsel before the exchange’s 2022 collapse, has agreed to pay $54 million to settle claims that it helped enable Sam Bankman-Fried’s fraud, according to a court filing on Friday.

The Fenwick settlement is the biggest piece of a second wave of FTX class settlements filed in federal court in Miami before U.S. District Judge K. Michael Moore. Auditor Prager Metis agreed to pay $11.75 million, and former Miami Heat forward Udonis Haslem, an FTX promoter, will pay $420,000.

Customers’ lawyers told the court that Fenwick “helped to craft and implement strategies that facilitated FTX’s fraud.” Fenwick rejected that account in a statement to Reuters, saying it “was not aware of the fraud at FTX, stands by the integrity of its legal work, and disputes wrongdoing of any kind.”

The filing folds in three more defendants on top of an earlier round of class settlements with 15 defendants that the court preliminarily approved in stages between December 2024 and July 2025. That first wave covered Bankman-Fried himself, former Alameda chief Caroline Ellison, ex-FTX engineering chief Nishad Singh, co-founder Gary Wang, former Fenwick partner Dan Friedberg (who later served as FTX’s chief compliance officer), and 10 celebrity promoters including Shaquille O’Neal, Tom Nash, Kevin Paffrath, Graham Stephan, Andrei Jikh, and Erika Kullberg.

Customer lawyers Adam Moskowitz and David Boies, the latter of whom is well known for his prior work representing Theranos, Jeffrey Epstein’s victims and disgraced film producer Harvey Weinstein, are also asking the judge to certify a single class covering anyone who held crypto or fiat on FTX, enrolled in a yield product, or bought FTT, FTX’s exchange token. FTX reported more than 1.2 million users at its peak, and the filing says the class is “in the millions.”

Plaintiffs also said they want to replace the FTX bankruptcy estate as the entity in charge of paying customers their share of the settlements. They are asking the court to install JND Legal Administration, citing cost and efficiency concerns with the estate. JND ran a similar program for the recent Ripple Labs class settlement.

To make sure claimants are not paid twice, the proposed allocation plan subtracts whatever each customer is recovering through the FTX bankruptcy from the value of their lost crypto, valued at CoinGecko prices on May 14, and fiat. FTT is only credited at the documented purchase price, and any FTT received for free is worth zero.

Not every investor is on board. A group of 18 individuals and three corporate plaintiffs from Hong Kong, Singapore, the UK, the EU, and South Korea, who say they have more than $500 million in losses, are pursuing their own lawsuit and asked the judge not to enter any orders that would sweep in their claims until he rules on a separate motion they filed earlier this year.

Fenwick still faces a $525 million civil suit in Washington, D.C. brought by 20 FTX victims against the firm, several current and former Fenwick attorneys, and other defendants, including Tyler Newby and Friedberg. That case, which alleges malpractice, fraud, and gross negligence, is not resolved by Friday’s deal.

The Fenwick settlement also stands out against the parallel class action that the same plaintiffs’ team brought against Sullivan & Cromwell, FTX’s bankruptcy counsel, in early 2024. The investors voluntarily dropped that suit in October 2024 after the court-appointed bankruptcy examiner concluded S&C was not complicit in the FTX fraud.

The settlement filing comes more than three years after FTX imploded in November 2022. Bankman-Fried is serving 25 years in federal prison after being convicted of stealing roughly $8 billion from customers and is appealing his conviction. The FTX bankruptcy estate has separately returned more than $5 billion to creditors and has pledged to make most customers more than whole on a dollar basis.

Judge Moore still has to grant preliminary approval of the second-wave deals before they can take effect. The plaintiffs are asking for a final approval hearing 90 days after that. Fenwick & West, Moskowitz, and attorney Anthony Scordo, who represents the foreign plaintiffs pursuing their own lawsuit, did not immediately respond to requests for comment from The Block.

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RichSilo Visions:

Executive Summary (TL;DR)

Fenwick & West’s $54 million settlement represents the accountability price for professional enablers in crypto fraud, signaling that institutional safeguards remain porous despite regulatory crackdowns. This settlement, however substantial, merely scratches the surface of potential liabilities in what could become a benchmark case for professional malpractice in digital assets.

The Core Friction

The settlement underscores a fundamental conflict between professional liability standards and crypto’s frontier market status. Fenwick’s rejection of wrongdoing while paying $54 million reveals the strategic calculus of legal risk management—cost of settlement versus cost of prolonged litigation and potential punitive damages. This isn’t about admission of guilt but about risk mitigation in a system where legal precedents for crypto malpractice remain undefined. The fact that bankruptcy counsel Sullivan & Cromwell was dropped from similar claims while Fenwick faces a $525 million separate suit creates a fascinating liability tier for professional services in crypto.

Market Impact & Chain Reaction

Short-term: The settlement reinforces negative sentiment toward centralized exchanges and their professional service providers, potentially creating selling pressure on tokens of exchanges with similar governance structures. The $66 million, while significant, represents a small fraction of FTX’s $8 billion fraud, suggesting limited direct market impact beyond FTX’s estate recovery.

Mid-term: This sets a precedent for heightened due diligence requirements from institutional investors, potentially benefiting non-custodial and self-custody solutions. The settlement process, which values assets at specific dates (May 14, CoinGecko prices), creates a pseudo-benchmark for crypto asset valuation in legal proceedings that could influence future insurance and collateral calculations.

RichSilo Verdict

Smart money should monitor the interplay between legal settlements and bankruptcy recoveries as FTX’s case establishes templates for crypto fraud liability. The most immediate watch is whether the $525 million separate suit against Fenwick succeeds, which could trigger a cascade of liability across professional service providers. For investors, the takeaway is clear: institutional-grade due diligence on service providers is no longer optional but a core component of risk management in digital assets.