FTX users and Silicon Valley law firm Fenwick & West said they have reached a proposed settlement tied to the exchange’s November 2022 collapse. In a joint filing submitted Friday in Florida federal court, the parties said they intend to present the deal for approval on Feb. 27 and asked the judge to pause pending deadlines and motions while the agreement is finalized. The filing did not disclose financial terms. The key development is that the case is shifting from courtroom combat to negotiated closure.
The matter sits within a broader push by users to hold advisers and partners accountable after FTX’s failure, which left millions unable to access their funds. With terms still undisclosed, the immediate focus is process, not payout, and Feb. 27 becomes the operational milestone for stakeholders. Both sides requested the pause so negotiations can conclude without friction.
Former FTX outside legal counsel Fenwick & West and FTX victims agreed to settle the class action lawsuit, with the law firm admitting no legal wrongdoing.
Fenwick cited litigation costs and potential reputational harm as reasons for the settlement. The settlement amount has… pic.twitter.com/TuLN4ZxeGb
— FTX Historian (@historian_ftx) February 2, 2026
Settlement timeline and core allegations
The lawsuit against Fenwick was first filed in 2023 and later amended in August. It alleged the firm played “a key and crucial role” by providing “substantial assistance,” including designing and approving corporate structures that allowed misconduct to continue undetected. The complaint said Fenwick advised FTX on structuring its operations to avoid certain money transmitter registration requirements. Plaintiffs argue the legal blueprint became an enabler, not a neutral service.
The suit also alleged Fenwick had visibility into commingling of customer funds and blurred operational boundaries between FTX and Alameda Research. It said Fenwick lawyers were eager to craft creative, but illegal strategies. Fenwick has consistently denied the allegations, saying it provided routine, lawful services and had no knowledge of any fraud. A pivotal inflection came in November, when the court rejected Fenwick’s motion to dismiss and allowed the amended complaint to proceed.
Broader fallout and contested narratives
The proposed settlement lands after mixed results in related accountability efforts. In February 2024, FTX users sued Sullivan & Cromwell, described as the exchange’s former primary outside counsel, alleging it played a role in the multibillion-dollar fraud, but that case was voluntarily dismissed eight months later, with plaintiffs citing insufficient evidence. This time, a Fenwick deal suggests at least one adviser track is moving toward resolution.
The report also notes Sam Bankman-Fried has claimed FTX was never insolvent and always had enough assets to repay customers, calling the collapse a classic bank run. He said the $8 billion shortfall cited during bankruptcy “never left,” argued recoveries up to 143% show a liquidity crunch, and said financing deals were underway. He wrote there have always been enough assets to repay all customers fully. Those claims keep the narrative contested even as litigation narrows.