Dissatisfied customers of the nowing crypto exchange FTX have proposed to change their lawsuit against Fenwick & West, the former legal adviser of the Exchange, with reference to new proof that the company played a key role in the collapse of the exchange.
Summary
- FTX customers have changed their lawsuit against Fenwick & West, with reference to new evidence from the trial and bankruptcy procedures of the stock exchange.
- The claimants claim that the law firm contributed to the design of structures that could be diverted in the customer funds.
- The submission adds claims of the constitutional rights in Florida and California because of the alleged role of Fenwick in the sale of FTX token.
FTX customers have the Changed application Before the court on 11 August, claiming that evidence of the criminal trial of Sam Bankman-Gefuurt and the bankruptcy procedure of FTX shows that Fenwick was deep involved “in the most important aspects of why and how the FTX fraud was achieved.”
They argued that the failure of the fair was not only the result of internal misconduct, but also the legal structures made and approved by Fenwick.
What does the changed court case claim?
Fenwick provided “substantial help” to FTX by designing and endorsing company regulations with which billions of dollars could be diverted to customer funds, the group said in its proposed submission.
They accused the company of representing “conflicting companies” FTX-related entities, such as trading company Alameda Research, and its subsidiary North Dimension, which “deliberately had no guarantees” to prevent abuse of assets, the group claimed that it was a central factor in the FTX expiration.
The claimants say that former FTX leaders, Nishad Singh, Gary Wang and Caroline Ellison, testified that Fenwick was aware of incorrect loans, false explanations and the abuse of customer funds, and even advised on ways to hide it.
Singh would have told the court that he informed Fenwick of these actions and in turn “Fenwick advised how he could facilitate and hide these actions,” noted the submission.
Findings by an independent researcher in the FTX bankruptcy are also included in the submission.
The examiner, after revising more than 200,000 documents in which Fenwick was said to be involved, concluded that the law firm had “exceptionally close relationships” with FTX leadership and “deeply intertwined” was in most aspects of his disposal and accused of the activa-entities Masking and masking assets transfers and setting up auto-delet signal chats used by FTX executives.
Plaintiffs also accused the law firm of the implementation of “other concealing practices that supervisors and prosecutors later cited as an obstruction” and would mislead these actions “investors and regulators.”
The submission introduces two new claims under the effects of Florida and California about the alleged role of Fenwick in the sale of FTX token.
“By his lawyers and under his leadership, Fenwick played an active role in designing, promoting and facilitating the sale of non-registered effects in the form of YBAs, FTT tokens and interests in other FTX-controlled instruments for residents of Florida,” a frag of the agreements.
Fenwick & West in previous procedures
The tires of Fenwick with FTX surfaced several times during the Bankman-Fried trial in the end of 2023. The former CEO has testified that the company, in addition to the own council of FTX, dealt with critical legal work, such as payment agent agreements for Alameda’s NORTH AFTENSAFT.
Bankman-Grieduurd said the court that Fenwick lawyers knew that FTX-Sinsiders used chats with Auto-Delete and said that he leaned heavily for their legal advice and that of other councilor.
Fenwick, in a motion of September 2023 to dismiss, assertions It could not be accused of the actions of a client when the work fell within the limits of representation and denied any claim in the original submission of the group.
