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Fenwick & West Hires Outside Legal Team Amid Scrutiny Over Role in FTX Cryptocurrency Exchange Collapse

published June 23, 2023

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Fenwick & West Hires Outside Legal Team Amid Scrutiny Over Role in FTX Cryptocurrency Exchange Collapse

Law Firm Fenwick & West Engages Outside Legal Team in Response to FTX Controversy
 

Gibson, Dunn & Crutcher Represents Fenwick in FTX-Related Matters
 
Law firm Fenwick & West has enlisted the assistance of an external legal team as it faces mounting scrutiny regarding its involvement with the now-bankrupt cryptocurrency exchange FTX. This includes scrutiny from Sam Bankman-Fried, the indicted founder of FTX. In response to Bankman-Fried's criminal defense, Fenwick, a Silicon Valley-based firm, has sought representation from Gibson, Dunn & Crutcher, as confirmed by court documents and reliable sources.
 
Gibson Dunn's prominent law firm defense practice is being led by Nancy Hart and Kevin Rosen, representing Fenwick on FTX matters. These include the Bankman-Fried criminal case and a federal class action lawsuit. Official spokespersons for Fenwick and Gibson Dunn declined to comment on the matter.
 
Fenwick, well-known for its representation of startups and technology clients, had been a primary external legal advisor to FTX during its rise to become one of the world's largest cryptocurrency exchanges. However, the exchange suffered a rapid collapse in November of last year. Fenwick also provided legal counsel to Bankman-Fried's hedge fund, Alameda Research, which is at the center of the criminal case against him. Bankman-Fried is facing fraud charges and campaign finance violations, as U.S. prosecutors allege that he misappropriated billions of FTX customer funds to support the struggling Alameda hedge fund. Bankman-Fried has pleaded not guilty and has requested the dismissal of a significant portion of the indictment.
 
Bankman-Fried has sought permission from the court to subpoena documents from Fenwick, claiming that they would demonstrate that he received legal advice regarding the charges in the indictment. These include guidance on the use of disappearing messaging apps and the necessity of registering one of his entities with regulatory authorities. In a court filing, Bankman-Fried's attorneys argued that the documents could strengthen their client's defense by proving that he followed legal counsel and did not intend to break the law.
 
Prosecutors have opposed the subpoena, arguing that it fails to specify the evidence relevant to the case. Fenwick has yet to express its position on this matter. Additionally, Fenwick has received subpoenas from federal law enforcement, as mentioned in a bankruptcy case filing by FTX lawyers. The content of these government subpoenas remains undisclosed. However, prosecutors have stated in court filings that the documents provided by Fenwick do not pertain to the issues raised by Bankman-Fried in the criminal case.
 
Fenwick, one of at least four major law firms that advised FTX, is not the sole target of Bankman-Fried's scrutiny. The former crypto billionaire has also been publicly at odds with New York firm Sullivan & Cromwell for its involvement in steering the exchange toward bankruptcy.
 
Moreover, Fenwick is named a defendant in a proposed class action lawsuit initiated by an FTX customer. The lawsuit alleges that the firm facilitated the establishment of entities used by Bankman-Fried to commit fraud and provided advice on transactions that allowed FTX to avoid regulatory oversight. Fenwick has yet to respond to the complaint. Recently, the case was transferred to a federal judge in Florida who oversees other lawsuits related to the collapse of FTX.

published June 23, 2023

( 5 votes, average: 4.4 out of 5)
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.