Silicon Valley Law Firm Fenwick & West Files to Dismiss FTX Class Action Lawsuit
Fenwick & West, a renowned Silicon Valley law firm, has denied allegations that it played a role in facilitating a fraud allegedly committed by bankrupt crypto exchange FTX.
The law firm has filed a motion to dismiss the lawsuit, claiming that its services provided to FTX were standard legal services and that it had no knowledge of any fraudulent activities, Bloomberg first reported.
The motion to dismiss, filed by Fenwick’s legal team at Gibson, Dunn & Crutcher, marks the firm’s first public defense against accusations related to its involvement with FTX and its co-founder, Sam Bankman-Fried.
FTX Customers Allege Fenwick Helped FTX Conceal Millions in Stolen Funds
FTX customers have alleged that Fenwick aided the cryptocurrency company in concealing millions of dollars in funds that were purportedly stolen from them.
In response to these allegations, Fenwick’s legal team, led by partner Kevin Rosen, argued that the firm’s services for FTX can be distilled into three basic acts.
These include employing lawyers who later joined FTX, forming corporations used by Bankman-Fried for business activities, and providing advice on regulatory compliance related to cryptocurrency trading.
The motion emphasized that a lawyer’s representation of a client and familiarity with its employees does not make them privy to the client’s internal operations.
It refuted the plaintiffs’ claim that Fenwick should be held responsible for providing “routine” and lawful legal services that allegedly contributed to fraudulent schemes, asserting that such a theory of liability contradicts the principles of the legal profession.
Fenwick, recognized for its work with prestigious Silicon Valley giants like Apple, Oracle, and Facebook, highlighted its reputation and integrity in its motion.
The firm expressed its concern that plaintiffs were attempting to hold it liable for damages stemming from the collapse of one client, FTX, without valid legal grounds.
Affected FTX Customers Seek to Hold Fenwick Accountable
FTX customers who were affected by the November 2022 collapse have initiated a multidistrict litigation in the US District Court for the Southern District of Florida.
In this legal battle, they are seeking to hold Fenwick accountable for its involvement with the cryptocurrency exchange.
Fenwick had served as a leading corporate counsel for FTX, advising on transactions, tax matters, and litigation.
The lawsuit against Fenwick is just one of several third-party cases involving FTX customers seeking compensation for their losses.
These cases involve a range of entities, from accounting firms to celebrity endorsers.