Bitcoin

A class action lawsuit was launched against BlockFi&#39;s founders, two directors, and cryptocurrency exchange Gemini by an investor with approximately $2 million in money stuck in the company&#39;s failed cryptocurrency lender.Investor Trey Greene accused the defendants of numerous wrongdoings in a complaint submitted on February 28 to the U.S. District Court for the District of New Jersey, including breaking the consumer fraud and exchange acts, breaching its fiduciary obligations, and offering and selling unregistered securities.&#34;The unregistered securities sold by the BFI [BlockFi] Defendants on behalf of BlockFi were marketed and sold through an ongoing series of misrepresentations and material omissions by Prince and Marquez over several years, as well as through sporadic misrepresentations by Defendant Gemini,&#34; according to the lawsuit.Greene asserts that he invested more than $1.5 million in interest accounts that are allegedly unregistered securities, gained more than $400,000 in capital gains, and reinvested the income and capital gains obtained.On Nov. 10, 2022, the day FTX filed for bankruptcy, BlockFi frozen all withdrawals, preventing him from accessing the money as of right now. Greene further asserts that the misrepresentations made by the founders of BlockFi, Zac Prince and Flori Marquez, that the offers were akin to federally insured bank products led to his purchase of the &#34;unregistered securities&#34;.BlockFi was accused by the Securities and Exchange Commission (SEC) of &#34;failing to register the offers and sales of its retail crypto lending product&#34; on Feb. 14, but according to the filing, during the proceedings that led to a $50 million settlement on Feb. 15, the exchange &#34;admitted its [interest] accounts were unregistered securities.&#34; the &#39;Tyler Winkevoss It is claimed that Gemini misrepresented how accessible these monies were to users when it provided custodial services to BlockFi&#39;s clients and kept custody over their cryptocurrency holdings.&#34;Gemini knew about and consented to the materially false and misleading claims about the status, the safety and accessibility of Plaintiff&#39;s and class members&#39; funds at Gemini and of the risks of loss,&#34; the lawsuit said. Gemini provided BlockFi with information that was both materially false and misleading in order to promote the BIAs (BlockFi interest accounts).Gemini was not included in the other claims, although it is claimed that it violated the exchange act.For each of the alleged counts, Greene is requesting damages, including &#34;treble damages&#34; for violations of the consumer fraud act, payment of his legal fees, a full refund of all funds received by the defendants, interest that has accrued, and a judgment barring future violations of the consumer fraud act.All BlockFi shareholders who bought their unregistered BlockFi Interest Accounts between March 4, 2019 and November 10, 2022 are those who are represented in the class action.The defendants will get a summons and have 21 days from the date of service to answer to the complaint or pay the entire amount asked by Greene.Gemini and BlockFi have been contacted by Cointelegraph, but no answer has been received as of the time of writing.

BlockFi Execs, Gemini Named in Proposed Lawsuit by a Disgruntled Investor

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