FTX law firm, auditor settle customer fraud claims for $66M

FTX’s former law firm Fenwick & West and former auditor Prager Metis agreed to pay about $66 million to settle customer fraud claims tied to the collapsed crypto exchange, extending the fallout from FTX beyond former executives to outside advisers, according to the federal court docket and reports by Reuters and The Block.

Fenwick is set to pay $54 million and Prager Metis $11.75 million. A separate $420,000 promoter settlement was also disclosed in the broader customer case, The Block reported. The payouts are small beside the scale of FTX’s collapse, but they add to customers’ efforts to pin liability on lawyers, auditors and other gatekeepers around the exchange.

Customers said Fenwick did more than provide routine legal work. As The Block reported, their lawyers said the firm:

“helped to craft and implement strategies that facilitated FTX’s fraud.”
— Customers’ lawyers, via The Block

Fenwick said the settlement resolves the Miami claims without an admission of liability and does not cover a separate $525 million suit in Washington. In a statement carried by Reuters, the firm said:

“was not aware of the fraud at FTX, stands by the integrity of its legal work, and disputes wrongdoing of any kind.”
— Fenwick & West, via Reuters

Prager Metis agreed to contribute $11.75 million as the multidistrict litigation continues before U.S. District Judge K. Michael Moore in Miami, according to the CourtListener docket. The settlement keeps the focus on whether advisers around crypto firms can face customer claims when those businesses unravel. In practice, the Miami case is testing whether customers can push liability past founders and on to the professional firms that reviewed or helped structure the exchange. Judge Moore continues to oversee that multidistrict litigation as claims against FTX-related parties move ahead.

Gatekeeper liability widens

The cases ask a narrower question than FTX’s criminal and bankruptcy proceedings: what outside advisers knew, what they signed off on and how they helped present the business to customers. That matters for a crypto industry still trying to persuade Washington and institutional investors that it can operate more like mainstream financial infrastructure. Legal and audit firms are often sold as part of that trust layer, which is why the settlements matter beyond their dollar amount. That pressure reaches beyond crypto specialists because legal and audit sign-offs are part of how exchanges try to reassure customers and trading counterparties.

The Block said the separate $525 million Washington action against Fenwick remains outside the Miami deal. That leaves one of the biggest adviser-liability claims tied to FTX unresolved and keeps pressure on law firms, auditors and promoters working with exchanges, stablecoin issuers and other digital-asset groups. It also means Friday’s settlements do not end the broader argument over how far professional gatekeepers should be exposed when a crypto client later proves fraudulent.

FTX once had about 1.2 million users at its peak, The Block reported. That scale helps explain why the litigation has spread well beyond former executives. Together with the $420,000 promoter settlement disclosed in the same case, the new agreements show the cost of FTX’s collapse is still reaching parties outside the exchange itself, even as the cash totals remain modest next to the exchange’s overall losses.