FTX Advisors Settle for $65 Million Amid $525 Million Lawsuit

Fenwick & West and Prager Metis agree to a $65.7M settlement over FTX ties, while a separate $525M lawsuit alleges active fraud concealment.

A settlement filed in a Miami federal court has emerged alongside a separate $525 million lawsuit against Fenwick & West, one of Silicon Valley’s most influential technology law firms.

Fenwick to Pay $54 Million

According to court documents, Fenwick & West will pay $54 million, while auditing firm Prager Metis will contribute an additional $11.75 million. Former NBA player Udonis Haslem, who was among the celebrities promoting FTX, will pay $420,000 as part of the agreement.

All parties continue to deny any wrongdoing, stating that the settlement was reached solely to avoid the costs and uncertainty associated with prolonged legal proceedings.

Plaintiffs argue that Fenwick helped FTX build a false sense of legitimacy for investors and customers. Simultaneously, they claim Prager Metis failed to report the risky and opaque connections between the exchange and Alameda Research.

Separate $525 Million Lawsuit Raises the Stakes

A much more significant threat to Fenwick remains a separate lawsuit in a Washington federal court. Filed by a group of 20 wealthy investors, the suit seeks $525 million in damages.

In contrast to the class action in Miami, this case accuses the firm of more than just negligence, alleging active concealment of fraud. The claim cites a report from the court-appointed examiner in the FTX bankruptcy and testimony from former company insiders.

Among the primary allegations is that Fenwick assisted in creating North Dimension Inc.—a shell company presented as an online electronics retailer. Plaintiffs claim this entity was used to funnel over $3 billion in customer funds.

Allegations of Concealment and Deleted Messages

The lawsuit further alleges that the firm helped implement communication policies using auto-deleting Signal messages. Federal prosecutors later identified this practice as a tool used to hide information from regulators.

Additional pressure stems from the testimony of Nishad Singh, the former Director of Engineering at FTX. Singh claims he warned Fenwick attorneys about the systematic misuse of customer funds.

According to the lawsuit, rather than distancing itself from the company, the firm advised management on how to cover up the financial shortfalls.

Growing Pressure on Consultants

The case illustrates how the FTX collapse is evolving from a case against Sam Bankman-Fried into a broader legal assault on the entire ecosystem of lawyers, auditors, and consultants surrounding the crypto industry.

While the $54 million settlement likely represents a manageable blow for Fenwick & West, a potential verdict in the separate $525 million case could pose an existential threat to the firm’s finances and reputation.