BLOCKFI.FI
id: 474
BlockFi (BlockFi) $13.25M Investor Settlement
The settlement terms have been submitted to the court for approval.
$13,250,000
Cash SettlementS.D. New York
Court2:23-cv-01165
Case number01/01/2019
Class period Start11/28/2022
Class period EndBlockFi has agreed to settle $13.25M with investors to resolve claims that it misled them about the safety and legality of its interest-bearing accounts and lending practices.
Outline
BlockFi was accused of promoting its crypto interest accounts as a secure investment option, between 2019 and 2022. However, in November 2022, the company froze withdrawals and later filed for bankruptcy. After that, BlockFi faced a lawsuit from investors.
Timeline
- March 2019 – November 2022 – BlockFi offered crypto interest accounts (BIAs) to the public.
- July 2021 – New Jersey and other states ordered BlockFi to stop offering unregistered securities.
- February 2022 – The SEC fined BlockFi $100 million over its unregistered interest accounts.
- November 10, 2022 – BlockFi froze withdrawals and limited account access.
- November 28, 2022 – BlockFi filed for bankruptcy.
- February 28, 2023 – Investors filed a lawsuit against BlockFi executives and its institutional partner, Gemini Trust Company, alleging fraud and misrepresentation.
- February 3, 2025 – BlockFi agreed to pay a $13.25 million settlement.
Background
BlockFi positioned itself as a regulated, bank-like crypto platform, offering high-yield interest accounts while assuring investors of strong risk management and compliance with securities laws.
However, in July 2021, U.S. state regulators ruled that BlockFi was selling unregistered securities, exposing the company to legal and financial risks.
Despite these warnings, BlockFi continued offering BIAs and reassured customers about its financial health.
But, in November 2022, BlockFi froze withdrawals, citing financial exposure to FTX and Alameda Research, both of which had collapsed. Bankruptcy filings later revealed that Alameda defaulted on $680 million in BlockFi loans, contributing to BlockFi’s insolvency.
Soon, investors filed a lawsuit claiming that BlockFi executives misled them about regulatory risks, the company’s financial health, and exposure to risky loans.
What Can Investors Expect Now?
BlockFi has agreed to settle $13.25M with investors to resolve claims that it misled them about the safety and legality of its interest-bearing accounts and lending practices.
If you were affected by this situation, you may be eligible to file for a payout and receive your share of the settlement. Check the FAQ section below for details on eligibility and claims.
Case Status
Stipulative Settlement
Alleged Offence
Mismanagement,
Misleading Statements,
Financial Misrepresentation,
Fraud,
Failure to Disclose,
Malpractice,
Negligence,
Breach of Fiduciary duty,
Omissions
Suspected Party
Directors,
Management,
Shareholder,
Influencer,
Investment Bank,
Service Provider,
Hedge Fund
Security Type
Crypto Asset
Trade Direction
Long
Filing date
01/28/2023
Plaintiffs
Trey Greene
Attorneys
Squitieri & Fearon; LLP Moore Kuehn, PLLC
Defendants
Zac Prince; Flori Marquez; Tony Laura
Administrator
Kroll
Attorney fee
$27,000,000
Trades matching type
FIFO
Frequently Asked Questions
Who is eligible for this settlement?
Do I have to sell securities to be eligible?
How long does the payout process take?
What is 11th Estate?