U.S. Court Nears Final Approval of $13M BlockFi Investor Settlement

A $13.2 million class-action settlement involving cryptocurrency lender BlockFi is nearing final approval after the last remaining objector withdrew opposition, clearing a significant hurdle for compensating approximately 89,000 U.S. investors who held interest accounts from March 2019 until BlockFi's bankruptcy in November 2022. The settlement, ordered by U.S. District Judge Claire Cecchi, requires BlockFi’s insurers to deposit the funds into an escrow account, with a final approval hearing scheduled for December 11. The lawsuit, filed in 2023, alleges BlockFi sold unregistered securities through misleading statements by leadership, including then-CEO Zac Prince and COO Flori Marquez, and highlights risky lending practices tied to Alameda Research as contributing factors to the collapse. BlockFi’s bankruptcy followed a broader crypto market downturn triggered by the TerraUSD collapse and the subsequent failure of firms like FTX, Celsius Network, and Voyager Digital. This $13 million settlement is separate from a previous $875 million agreement BlockFi reached with FTX and Alameda Research as part of its Chapter 11 bankruptcy proceedings, which are also aimed at repaying creditors and returning crypto assets to users. Investors are advised to monitor court filings for updates on claim procedures and distribution timelines following final court approval.