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FTX former legal team denies involvement in fraud allegations.

United States-based law firm Fenwick & West has strongly denied allegations of misconduct and involvement in fraudulent activities related to its previous legal services provided to the now-defunct cryptocurrency exchange FTX.

In a court filing on September 21, Fenwick & West refuted all accusations made against them concerning their role during FTX operations.

“It is black-letter law that an attorney cannot be held liable for conspiracy or aiding and abetting a client’s wrong “‘as long as [his] conduct falls within the scope of the representation of the client.’”

Filing in the U.S. District Court for the Southern District of Florida.

The plaintiffs argue that Fenwick & West, while providing legal services within the legal boundaries, allegedly had their advice misused by Sam Bankman-Fried to facilitate fraudulent activities.

Additionally, they claim that Fenwick & West went beyond the usual scope of service offerings provided to FTX.

According to the filing, the plaintiffs assert that Fenwick & West can be held accountable as they allegedly “exceeded the typical scope of services rendered by a law firm” by providing extensive services to the FTX Group entities.

Lawsuit Alleges Excessive Services by Fenwick & West in FTX Case

Fenwick & West in FTX

Considering the allegations, the plaintiffs assert that Fenwick & West can bear responsibility for allegedly providing services to the the cryptocurrency exchange Group entities that surpassed the anticipated scope for a law firm, as indicated in the filing.

“If Plaintiffs’ allegations were sufficient to state a claim against Fenwick for conspiracy and aiding and-abetting liability, then any lawyer could be hauled into court and forced to answer for his client’s misconduct. That is not the law.“

Notably, this development follows a lawsuit filed by FTX’s debtors against former employees of Salameda, a company incorporated in Hong Kong that had previous connections with the FTX group.

Furthermore, FTX has initiated legal proceedings to reclaim $157.3 million, asserting that someone unlawfully withdrew the funds shortly before the exchange filed for bankruptcy.

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