Bankrupt Crypto Exchange FTX customers are looking to update their lawsuit against FENWICK & West, one of the firms of law previously contracted by the company, which claims new information shows that it is central to the FTX collapse.
The criminal test of former FTX CEO Sam Banke-frying And investigations in the exchange of exchange losses “make specific evidence that Fenwick plays a key and important role in the most important aspect of why and how FTX fraud is achieved,” FTX customers wrote in a court File to change their suit on Monday.
“Simply put, FTX fraud is only possible because Fenwick has provided ‘great help’ by creating and approved of structures that allow for many scams,” the group said.
They have accused the law firm of agreeing to create, manage and represent “clear conflicting companies” such as FTX’s trading firm Firm Alameda Research and its subsidiary in North Dimension, “with a goal without caution to avoid billions of dollars admittedly stolen.
FTX fraud was once described by prosecutors as one of the largest in US history.
The filing was part of a massive multi-district class filed by FTX users after it collapsed in late 2022 who brought claims against exchanges, celebrities accused of promoting FTX and many companies allegedly working at the firm, among others.
Fenwick denied and moved to remove the allegations to a previous complaint filed in August 2023. Fenwick & West did not immediately return Cointelegraph’s request for comment.
Bankman-Fried Trial opens new information, says the complaint
The proposed amended complaint said last year’s bankman-fried criminal trial had no new information on how Fenwick helped FTX.
FTX co-founder Zixiao “Gary” Wang, former Alameda CEO Caroline Ellison and FTX ex-engineering director Nishad Singh sought off and testified against the bankman-fried, with a jury finding him guilty of seven charges related to cheating and losing money.
“In the SBF’s criminal trial, FTX Insider and co-founder Nishad Singh testified that he informed Fenwick the misuse of customer funds, improper loans, and false representations, and Fenwick advised how to facilitate and hide these actions,” said the filing.
The group is claimed in a separate File This has “learned a lot more details on Fenwick’s relationship with FTX, based on interviews cooperation with fixed FTX insider.”
Bankruptcy Court found Fenwick “deeply interrelated” to FTX, the customers’ claim
File announced that an independent reviewer of the Court’s nominated FTX losses “has reviewed more than 200,000 internal documents (many related directly to FENWICK) and concluded that FENWICK is particularly related to almost all aspects of FTX group’s wrongdoing.”
According to the group, the reviewer found Fenwick “uniquely close relationship” with the FTX executive team and “facilitated conflicting intercompany transactions that incorrectly used customer ownership.”
They also said the reviewer accused Fenwick of creating shell companies “to diminish asset movements” and behind the implementation of auto-removal messages sent between FTX executives through encrypted messaging app signal.
Related: Binance founder Changpeng Zhao is looking for the dismissal of $ 1.8B FTX suits
Fenwick’s team has also accused “other secretion skills that regulators and prosecutors are mentioned as obstruction” and claim the law firm “knowing that these actions will deceive investors and regulators.”
Fenwick hits two new security claims
The suggested complaint adds two new claims to state law, accusing Fenwick of violating Florida and California security laws in the exchange of exchange, FTX token (FTT).
The group accused the law firm playing “an active role in designing, promoting, and facilitating the sale” of FTT, accounts that bring the produce offered by FTX and “interests to other FTX -controlled instruments,” which they claim to be unregistered security.
Fenwick argued motion to delete The previous complaint filed in September 2023 said it could not be performed for helping a client’s wrongdoing as long as “its behavior falls into the scope of the client’s representation.”
The group was brought to Sullivan & Cromwell, another law firm contracted by FTX, accusing it of helping the exchange, but they Eventually falls the complaint due to lack of evidence for their claims.
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