Last Updated: August 11, 2023
• A class-action lawsuit has been filed against FTX’s primary counsel, Fenwick & West LLP, claiming they set up “shadowy entities” to help conceal and enable fraud.
• The lawsuit alleges that Fenwick & West went beyond its traditional legal role by assisting FTX in structuring acquisitions for FTX US and encouraging staff to act upon strategies from the law firm itself.
• The suit highlights two mysterious entities – North Dimension and North Wireless Dimension – as having a pivotal role in diverting misappropriated customer funds towards Alameda Research, a trading firm of Bankman-Fried.
FTX Legal Advisors Face Fraud Conspiracy Allegations
FTX’s primary counsel, Fenwick & West LLP, finds itself in a legal quandary due to a new class-action lawsuit claiming the law firm set up “shadowy entities” to help conceal and enable fraud. This is not the first time the law firm has found itself embroiled in a legal battle linked to FTX as earlier this year another class-action lawsuit was filed alleging that the firm assisted Bankman-Fried and FTX in their business setup.
Allegations of Shadowy Affairs
The latest lawsuit claims that Fenwick & West went beyond its traditional legal role by assisting FTX in structuring acquisitions for FTX US designed to dodge regulatory scrutiny, as well as encouraging staff to act upon strategies conceived by the law firm itself. It also alleges that two mysterious entities – North Dimension and North Wireless Dimension – played a pivotal role in diverting misappropriated funds belonging to FTX customers towards Alameda Research, a trading firm of Bankman-Fried. Furthermore, it is alleged that an implied agreement existed among FTX, its affiliates, and the law firm designed to mislead customers with financial benefits being a motivating factor.
Who Are the Mysterious Entities?
North Dimension and North Wireless Dimension are two shadowy figures at the heart of this controversy with their alleged involvement involving diverting misappropriated funds belonging to customers towards Alameda Research. The plaintiffs contend that Fenwick & West deliberately overlooked misrepresentations made by FTX operators which encouraged them into entering agreements with these companies without fully understanding what they were signing up for or how these companies would benefit them financially.
Who Are The Central Figures?
At the center of this drama is Sam Bankman Fried (SBF) who along with his co-conspirators have been facing numerous legal battles since the collapse of his empire earlier this year. Alongside SBF are those associated with FTX such as Fenwick & West who find themselves entangled in these lawsuits alleging fraud conspiracy which could potentially see customer funds recovered if successful.
With its reverberations still persisting even today, it remains uncertain how long until we finally get some closure on this case but nevertheless it serves as an important reminder of why it’s essential for investors or anyone dealing with cryptocurrency platforms to do their due diligence before getting involved with any company or individual operating within this sector.