Key Takeaways:
- BlockFi founders and Gemini are the subjects of a class action lawsuit filed by an investor over frozen money.
- As per the lawsuit, BlockFi and Gemini Trust Co. should be held accountable for any digital assets loss in the company’s investment accounts.
- The investor demands payment for all damages allegedly committed against him by BlockFi and Gemini.
An investor with roughly $2 million in frozen assets in the bankrupt cryptocurrency lender BlockFi filed a class-action complaint against BlockFi’s executives, two directors, and cryptocurrency exchange Gemini.
As per the complaint, The cryptocurrency company BlockFi, Inc., located in New Jersey and owned by the BFI Defendants but founded by Prince and Marquez, sold unregistered securities as the basis for this lawsuit.
The unauthorised securities sold by the BFI (BlockFi) Plaintiffs on behalf of BlockFi were promoted and sold through an ongoing stream of false statements and significant omissions by Prince and Marquez over an extended period of time, as well as through periodic false statements by Defendant Gemini.
Investor Trey Greene claimed the defendants of multiple misconducts, ranging from offering and selling unregistered securities, breaking the investor fraud and exchange acts, breaching their fiduciary obligations, and violating other laws.
Trey Greene contends that the unregistered “BlockFi interest accounts” are securities and that BlockFi is one of the biggest sellers and suppliers of unregistered securities to citizens of the United States and other nations in the guise of interest-bearing accounts.
Following the FTX collapse, Blockfi has instantaneously descended into never ending controversies. The Crypto lender had a $1.2 billion exposure to the defunct FTX as of last month.
Crypto exchange Gemini has also been in a lot of trouble lately. Gemini Earn, a product of Gemini Trust Company, recently came under fire after a report claimed that users were misinformed about FDIC coverage.
In the most recent complaint, Greene alleges that she invested more than $1.5 million in interest accounts, which are said to be unregistered securities that generated capital gains and more than $400,000 in interest.
Unfortunately, he is no longer able to withdraw the money because BlockFi stopped allowing withdrawals on November 10 in response to FTX’s bankruptcy declaration.
Additionally, it is claimed in the complaint that BlockFi skewed the risks related to its investment accounts and neglected to provide investors with critical information.
Greene is asking for compensation for each of the purported count data, including “treble damages” for consumer fraud act infringements, reimbursement of his legal fees, a complete compensation of all funds received by the defendants, interest that has accumulated, and a ruling prohibiting further breaches of the act.
There is no denying that how the lawsuit turns out could have a big impact on the cryptocurrency market.
