• An investor with nearly $2 million worth of funds frozen in bankrupt cryptocurrency lender BlockFi has filed a class-action complaint against its founders, two directors and crypto exchange Gemini.
• The investor alleges that the defendants violated multiple laws and offered unregistered securities.
• He also claims that he was misled by the founders of BlockFi into investing in what were allegedly unregistered securities.
Investor Files Class-Action Complaint Against BlockFi
An investor with nearly $2 million worth of funds frozen in bankrupt cryptocurrency lender BlockFi has filed a class-action complaint against its founders, two directors and crypto exchange Gemini on Feb 28th in the U.S. District Court for the District of New Jersey.
Allegations Made By Investor
The investor is accusing the defendants of numerous wrongdoings such as violating consumer fraud and exchange acts, breaching fiduciary duties, and offering and selling unregistered securities. In addition to this, he claims he was induced into buying these “unregistered securities” through misleading information provided by the founders of BlockFi.
Funds Frozen After Bankruptcy Filing
The investor had invested over $1.5 million in interest accounts which are alleged to be unregistered securities, accruing over $400,000 in capital gains and earned interest that was re-invested. Unfortunately all withdrawals were frozen on Nov 10th after FTX filed for bankruptcy leaving him unable to withdraw his funds from BlockFi anymore.
Gemini Named In Lawsuit
Gemini is accused of providing custodial services to BlockFi as well as giving misleading information to help them market their alleged unregistered securities.
Conclusion
The proposed class-action lawsuit seeks damages for any losses incurred by investors due to wrongful actions by the defendants involved in this case.
