FTX’s former external legal team disputes involvement in fraud allegations
A law company that previously offered services to the now-defunct cryptocurrency exchange FTX has refuted a class-action lawsuit brought against it, declaring that it assisted in the exchanges alleged deceptive activities.According to a Sept. 21 court filing, United States-based law practice Fenwick & & West rejects all accusations of misconduct related to the arrangement of legal services throughout FTX operations:”It is black-letter law that a lawyer can not be held responsible for conspiracy or abetting a client and helpings incorrect “as long as [his] conduct falls within the scope of the representation of the customer.” Filing in the U.S. District Court for the Southern District of Florida. Source: Thomson ReutersThe complainants contend that while Fenwick supplied routine legal services within the bounds of the law, Sam Bankman-Fried apparently misused the suggestions to advance his fraudulent activities.They even more argued that Fenwick exceeded the norm in its service offerings to FTX.The complainants allege that Fenwick can be held accountable since it supposedly “provided services to the FTX Group entities that worked out beyond those a law office should and generally does provide,” the filing states.Related: Cryptos Lehman minute: Investors purchase $250M of FTX claims– ReportIt further claims that workers of Fenwick chose to depart from the company and sign up with FTX voluntarily.Additionally, the filing repeated that Fenwick assisted in developing corporations utilized by Bankman-Fried in his fraud and encouraged FTX on regulatory compliance in the progressing crypto landscape.However, Fenwick argued it needs to not bear liability as it was not the sole law company representing FTX. It asserts that it played a relatively bit part in offering numerous elements of legal guidance to the bankrupt exchange.”If Plaintiffs claims sufficed to state a claim versus Fenwick for conspiracy and aiding and-abetting liability, then any lawyer might be carried into court and forced to respond to for his customers misbehavior. That is not the law.”This comes after FTX debtors submitted a suit against former employees of the Hong Kong-incorporated company Salameda, which was formerly associated with the FTX group.FTX initiated legal action to recover $157.3 million, declaring that the funds were illicitly withdrawn soon before the exchanges insolvency filing.Magazine: Deposit danger: What do crypto exchanges truly do with your cash?