FTX Customers Update Lawsuit, Accuse Law Firm of “Key” Role in Collapse

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Ah, the ever-dramatic world of cryptocurrency! It seems that the saga of the bankrupt FTX exchange just keeps unfolding like a Dostoevskian tragedy-except with more numbers and fewer Russian accents. This time, the customers of FTX are adding a little more drama to their lawsuit, now targeting Fenwick & West, the law firm once cozy with FTX. Apparently, some “new information” has surfaced-information so juicy that it could make even the coldest prosecutor break a sweat.

According to the customers, the criminal trial of the former FTX CEO, Sam Bankman-Fried (or as the internet likes to call him, “the crypto king of chaos”), along with the bankruptcy investigations, have revealed *specific evidence* pointing directly to Fenwick’s involvement in the grand crypto catastrophe. A court filing from Monday alleges that Fenwick was as central to the FTX disaster as, say, a loaf of bread to a sandwich. The group suggests that, without Fenwick’s “substantial assistance,” the FTX fraud would never have been possible. Wow, talk about being an accomplice by proxy!

They go on to accuse the law firm of helping to create and manage “clearly conflicted companies” like Alameda Research and its offshoot, North Dimension. The alleged role of Fenwick in these companies? Oh, just making sure there were no pesky safeguards in place to stop billions of dollars from being “accidentally” stolen. Classic move! 😏

We’ve all heard of the “biggest fraud in U.S. history”-because, well, it *was* one. It’s like the Bernie Madoff scandal, but with more crypto bros and fewer yachts. But let’s not get sidetracked.

Fenwick, however, is as cool as a cucumber in a freezer. They’ve denied all allegations, even filing a motion to dismiss the previous complaint in August 2023. They didn’t immediately return any calls from CryptoMoon (surprise, surprise!).

The Trial That Uncovered It All

And if you thought things couldn’t get juicier, guess what? The criminal trial of Sam Bankman-Fried has opened up new insights into how Fenwick may have helped FTX. It’s like opening Pandora’s box… but instead of ancient evils, there are more documents. Bankman-Fried’s ex-collaborators-Zixiao “Gary” Wang, Caroline Ellison, and Nishad Singh-have all pleaded guilty and spilled the beans. We now know that Nishad Singh, the ex-engineering director at FTX, personally informed Fenwick about misusing customer funds and various shady dealings. And Fenwick? They just nodded and said, “Oh, let’s help you hide that.” How convenient!

The group claims to have *more details* from interviews with FTX insiders, suggesting Fenwick’s cozy relationship with the exchange goes deeper than a corporate merger. Nice to know you’re so “integrated” with your client. 👀

The Bankruptcy Court’s Not-So-Friendly Reminder

Next, the independent examiner from the FTX bankruptcy court threw another wrench into the works. After reviewing over 200,000 documents, the examiner concluded that Fenwick was *deeply intertwined* in FTX’s wrongdoing. This is starting to sound like a bad marriage-where one party conveniently “forgets” to disclose everything while making all the wrong decisions. Fenwick allegedly facilitated “conflicted intercompany transactions” and even helped hide asset movements by creating shell companies. Let’s face it: the examiner didn’t paint them as the good guys. But hey, who needs integrity when you can make money?

There’s also mention of Fenwick being behind auto-deleting messages on Signal, the encrypted messaging app. Because, you know, transparency is overrated. Who knew deleting messages was part of a legal strategy? 🙄

More Claims Against Fenwick

As if all that weren’t enough, Fenwick is now being hit with two new securities claims in Florida and California over FTX’s cryptocurrency, FTX Token (FTT). The group alleges Fenwick actively participated in promoting, designing, and facilitating the sale of these “unregistered securities.” Oh, the plot thickens!

Fenwick, of course, is sticking to their guns, arguing that they were just doing their job-representing their client in a way that “falls within the scope” of what a law firm does. Sure, that sounds totally reasonable… if you conveniently forget about the fraud and the billions of dollars in stolen assets.

The group had also filed a lawsuit against Sullivan & Cromwell, another law firm connected to FTX. But they later dropped it due to a lack of evidence. So, good thing Fenwick is here to pick up the slack! 👍

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2025-08-12 06:19