A law firm that previously provided services to the now-defunct cryptocurrency exchange FTX has refuted a class-action lawsuit filed against it, claiming it aided in the exchange’s alleged fraudulent activities.
According to To September. In Court File No. 21, US-based law firm Fenwick & West denies all accusations of misconduct related to the provision of legal services during FTX’s operations:
“It is a black law in which a lawyer cannot be held liable for conspiracy or aiding and abetting the wrongdoing of his client,” As long as [his] The conduct falls within the scope of the client’s representation.”
Prosecutors assert that while Fenwick provided regular legal services within the bounds of the law, Sam Bankman-Fried allegedly abused the advice to advance His fraudulent activities.
They also argued that Fenwick went beyond the rule in its service offerings to FTX.
Prosecutors claim Fenwick can be held liable because it “provided services to the FTX Group entities that went well beyond those a law firm should and typically would provide,” the filing states.
Related: Crypto’s Lehman Moment: Investors Buy $250 Million in FTX Claims – Report
It also claims that Fenwick employees chose to leave the company and join FTX voluntarily.
Additionally, the motion reiterated that Fenwick helped set up the companies that Bankman-Fried used in its frauds and advised FTX on regulatory compliance in the evolving cryptocurrency landscape.
However, Fenwick said it should not be held liable because it is not the only law firm representing FTX. It asserts that it played a relatively minor role in providing various aspects of legal advice to the bankrupt exchange.
“If Plaintiffs’ allegations were sufficient to bring a case against Fenwick for conspiracy and aiding and abetting liability, any lawyer could be taken to court and forced to answer for his client’s misconduct. That is not the law.”
This comes after FTX’s debtors filed a lawsuit against former employees of Hong Kong-listed Salameda, which was formerly affiliated with FTX Group.
FTX has initiated legal proceedings to recover $157.3 million, alleging that the funds were illegally withdrawn shortly before the exchange declared bankruptcy.
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