BlockFi (BlockFi) $13.25M Investor Settlement
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.
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.
Frequently Asked Questions
All persons or entities who invested, deposited, or otherwise acquired assets in BlockFi Interest-Bearing Accounts between January 1, 2019 to November 28, 2022, inclusive, and were damaged thereby
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
1. Prepare documents for your payout
2. Audit the claim and make sure you get the maximum possible payout
3. File a claim with the settlement administration
4. Correspond with the settlement administration to resolve emerging issues
5. Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.