A law firm that formerly provided services to the now-defunct cryptocurrency exchange FTX has dismissed a class action lawsuit filed against it, claiming it participated in the exchange’s alleged fraudulent activities.
According to a September 21 court filing, US-based law firm Fenwick & West denies all allegations of misconduct related to the provision of legal services during FTX operations:
“It is a law that a lawyer cannot be held liable for conspiring or aiding and abetting a client’s injustice,” as long as [his] The behavior is the responsibility of the client.’”
Filed in the U.S. District Court for the Southern District of Florida. Source:
The plaintiffs allege that while Fenwick regularly provided legal services under the law, Sam Bankman-Fried allegedly misused the advice to further his fraudulent activities.
They further argued that Fenwick went above and beyond the norm with its service offerings for FTX.
The plaintiffs claim that Fenwick can be held liable because it allegedly “provided services to the FTX Group companies that went well beyond what a law firm should and normally does,” the lawsuit says.
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Additionally, it is alleged that Fenwick employees chose to leave the company and join FTX voluntarily.
Additionally, the filing reiterated that Fenwick helped set up companies that Bankman-Fried used in his fraud and advised FTX on regulatory compliance in the evolving crypto landscape.
However, Fenwick argued that it should not accept liability because it is not the only law firm representing FTX. She claims she played a relatively minor role in providing various aspects of legal advice to the insolvent stock exchange.
“If the plaintiffs’ allegations were enough to charge Fenwick with conspiracy and aiding and abetting liability, then any lawyer could be hauled into court and forced to answer for their client’s misconduct. “That’s not the law.”
This comes after FTX Debtors filed a lawsuit against former employees of Hong Kong-based Salameda, which was previously affiliated with the FTX Group.
FTX launched legal action to reclaim $157.3 million, claiming the funds were illegally withdrawn shortly before the exchange filed for bankruptcy.
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