Former FTX Law Firm Reaches Settlement with Auditor, Combined Payment of $66 Million

The FTX bankruptcy case accountability wave continues to progress. Silicon Valley law firm Fenwick & West agreed on Friday to pay $54 million to settle a lawsuit accusing it of helping Sam Bankman-Fried (SBF) carry out fraud, becoming the largest single payout in the second round of class action settlements related to FTX.

Second Round Settlement: A Total of $66 Million from Three Parties

This settlement, filed under the auspices of Miami federal court judge K. Michael Moore, involves three defendants: Fenwick & West pays $54 million, audit firm Prager Metis pays $11.75 million, and former Miami Heat player and FTX ambassador Udonis Haslem pays $420,000, with a combined total of approximately $66 million from all three parties.

The plaintiffs' attorneys accused Fenwick in court documents of "helping to devise and implement strategies that promoted FTX's fraud." Fenwick denied this in a statement, saying "they were unaware of FTX's fraudulent activities, firmly believe in the professionalism of their legal work, and deny any wrongdoing."The Scope of Accountability Continues to Expand

This round of settlement is a continuation after the first round of settlements from December 2024 to July 2025, which involved 15 defendants. The first round included Bankman-Fried himself, former Alameda Research CEO Caroline Ellison, former engineering director Nishad Singh, co-founder Gary Wang, and 10 celebrity endorsers, including Shaquille O'Neal.

Plaintiff lawyers Adam Moskowitz and David Boies—Boies who represented victims of Theranos, Jeffrey Epstein, and Harvey Weinstein—simultaneously requested the judge to recognize a unified litigation category, covering all users who have held cryptocurrency or fiat at FTX, participated in revenue products, or purchased FTT tokens. FTX had over 1.2 million registered users at its peak, and the plaintiffs claim that the actual number of people affected "reaches millions."Payment Mechanism and Controversy

Regarding the payment arrangements, the plaintiffs suggested calculating losses based on the CoinGecko price of May 14th, and deducting compensation already received from clients from the FTX bankruptcy process to avoid duplicate payments; FTT tokens are valued only at the documented purchase price, with the value of free FTT given being zeroed out.

However, not all investors agree with this plan. Eighteen individual and three institutional plaintiffs from Hong Kong, Singapore, the UK, the EU, and South Korea claim losses exceeding $500 million, are independently advancing litigation, and are requesting the judge to suspend their claims from being included in the class action.Fenwick's Legal Risks Remain Unresolved

It is worth noting that this settlement does not conclude all the legal risks faced by Fenwick. The company still faces a $525 million civil lawsuit filed by 20 FTX victims in Washington, D.C., accusing it of misconduct, fraud, and gross negligence, which is not covered in this settlement.

Currently, Judge Moore still needs to give a preliminary approval of the second round of settlement plans, after which the plaintiffs will apply for a hearing for final approval within 90 days. Since FTX's collapse in November 2022, more than three years have passed, Bankman-Fried has been sentenced to 25 years in prison for stealing approximately $8 billion in client assets and is appealing the conviction. The FTX bankruptcy administrators have repaid over $5 billion to creditors and have committed to full compensation for the vast majority of customers on a U.S. dollar basis.