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In a noteworthy development, US law firm Fenwick & West has agreed to pay $54 million to settle claims arising from its legal services for the defunct crypto exchange FTX. The proposed settlement, filed in federal court in Miami on Friday, resolves allegations from FTX customers who accused the Silicon Valley-based firm of facilitating misconduct tied to one of the largest financial frauds in US history.

Fenwick Denies Knowledge Of FTX Illicit Activities Despite Settlement

According to court filings as reported by Reuters, Fenwick & West served as a lead outside counsel for FTX during the exchange’s rapid expansion into a global crypto trading platform. Plaintiffs in the class action lawsuit alleged the firm “helped to craft and implement strategies that facilitated FTX’s fraud,” accusing the lawyers of assisting with regulatory and operational structures later tied to the misuse of customer funds.

The proposed settlement agreement still requires approval from US District Judge K. Michael Moore in Miami. Attorneys representing FTX customers, including prominent litigator David Boies, argued the deal was reasonable and would prevent prolonged and costly litigation.

However, Fenwick rejected allegations that it knowingly participated in fraudulent conduct. In a public statement, the law firm said it “was not aware of the fraud at FTX,” adding that it stood by the integrity of its legal work. The $54 million agreement marks the largest settlement in a second wave of FTX-related class action resolutions.

Other settlements include an $11.75 million payment from former FTX auditor Prager Metis and a $420,000 settlement involving former Miami Heat player Udonis Haslem, who promoted the exchange.

The Journey So Far

FTX collapsed in November 2022 after revelations that an estimated $11- $13 billion in customer funds had allegedly been diverted to its sister trading firm, Alameda Research. The exchange’s bankruptcy triggered widespread panic across the digital asset market and erased $200 billion in global crypto market cap.

In 2024, founder Sam Bankman-Fried was convicted on fraud and conspiracy charges and sentenced to 25 years in prison. Although he pleaded not guilty and has since appealed the conviction, claiming the initial trial was unfairly prejudiced against him.

Meanwhile, the FTX Recovery Trust has continued efforts to reimburse affected creditors under the company’s Chapter 11 restructuring process. In March 2026, the estate announced a fourth distribution of approximately $2.2 billion, bringing cumulative repayments to eligible claimants close to $10 billion. Several customer classes, including many US-based users, have reportedly reached full or near-full recovery levels under the court-approved repayment plan.

Kalshi is facing a $54 million class action lawsuit after traders accused the prediction market of invoking a “death carveout” clause to avoid paying bets tied to the killing of Iran’s supreme leader, according to reporting from Reuters.

Kalshi was sued in federal court Thursday over contracts that asked whether Ayatollah Ali Khamenei would leave office before March 1, 2026, according to a class action complaint.

Khamenei, 85, was killed Saturday in U.S.-Israeli strikes that left hundreds dead, including top Iranian officials. The strikes occurred under Operation Epic Fury.

The lawsuit says customers were drawn to what it calls the “Khamenei Market” because of the shifting geopolitical situation with Iran’s leadership. It alleges that, after Khamenei was killed, Kalshi invoked a “death carveout” provision to avoid paying customers what they were owed.

JUDGE BLOCKS META FROM INTRODUCING ‘EXAGGERATED’ CLAIMS IN SOCIAL MEDIA TRIAL

Iranian Supreme Leader Ali Khamenei addresses the nation in a state television broadcast June 18, 2025, in Tehran, Iran.  (Office of the Supreme Leader of Iran via Getty Images / Getty Images)

“With an American naval armada amassed on Iran’s doorstep and military conflict not merely foreseeable but widely anticipated, consumers understood that the most likely — and in many cases the only realistic — mechanism by which an 85-year-old autocratic leader would ‘leave office’ was through his death,” the lawsuit states.

“Defendants understood this as well.”

The complaint argues the contract language was “clear, unambiguous and binary” and accuses Kalshi of “deceptive” and “predatory” conduct.

APPLE IMPLEMENTING AGE VERIFICATION TOOL TO ENSURE USERS ARE 18 AND UP FOR SOME APPS

A billboard for Kalshi showing 2024 U.S. presidential election odds across from the Nasdaq MarketSite in New York Nov. 6, 2024. (Michael Nagle/Bloomberg via Getty Images / Getty Images)

The lawsuit was filed in the U.S. District Court for the Central District of California.

The company’s CEO, Tarek Mansour, on Saturday defended the “death carveout,” saying it “keeps the rules simple.” He also said Kalshi would reimburse all fees from the Khamenei market.

Prediction markets have exploded in popularity since the 2024 U.S. election, when their real-time probabilities proved more accurate than polling in forecasting Donald Trump’s victory, according to Reuters.

Two Iranian-made unmanned aerial vehicles are displayed at Azadi Square during a rally to mark the 44th anniversary of the victory of Iran’s 1979 Islamic Revolution, in Tehran, Iran, Feb. 11, 2023.  (Morteza Nikoubazl/NurPhoto via Getty Images / Getty Images)

Platforms like Kalshi offer tradable yes-or-no contracts tied to real-world events ranging from politics and sports to the economy. Contracts typically cost between zero and 100 cents and pay out if a…