A $13.2 Million Settlement for BlockFi Investors Nears Approval
A $13.2 million class action settlement for BlockFi investors is on the verge of approval as the sole remaining objector has withdrawn his challenge. This development paves the way for thousands of investors who lost access to funds when the crypto lender collapsed in 2022 to potentially receive compensation.
Objector Withdraws Challenge
Attorneys representing the lead plaintiffs submitted a letter to U.S. District Judge Claire Cecchi, informing her that Yacov Baron had retracted both his motion to intervene and his objections to the proposed settlement. This move could eliminate the final obstacle for the approval of the settlement.
Settlement Details
The proposed settlement encompasses all U.S. holders of BlockFi interest accounts between March 2019 and November 2022. With Baron’s opposition out of the way, approximately 89,000 account holders may soon receive compensation for their frozen investments.
“Those who have opted out of class settlements can pursue an individual claim and seek compensation for specific harm, rather than being bound by the terms of the class settlement,” explained Navodaya Singh Rajpurohit, a legal partner at Coinque Consulting.
BlockFi’s Downfall and Legal Ramifications
BlockFi’s collapse in 2022 was a domino effect triggered by the implosion of TerraUSD stablecoin, leading to a lender crisis. The company’s exposure to FTX and Alameda Research eventually led to its bankruptcy filing.
Court documents revealed that CEO Zac Prince was aware of FTX’s questionable financial position but continued business with the firm. Meanwhile, Do Kwon, the founder of TerraUSD, pleaded guilty to fraud charges and faces up to 12 years in prison.
Legal Options for Victims
While some investors opted out of bankruptcy protections, the proposed settlement aims to distribute funds equally among all class members. Victims of investment scams or crypto platform failures are urged to consider legal action to recover their funds.
“Advancements in blockchain tracing technology now allow for the identification of misappropriated funds, increasing the chances of recovery for affected individuals,” stated Andy Lau, Partner at David Cameron Law Office.