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BlockFi, Inc.

Class Action
  • Active
Investigation
02/14/2022
Initial Lawsuit
03/01/2022
Lawsuit Progression
05/02/2022

Investigation

Investors’ investigation related to BlockFi’s alleged sale of unregistered securities in the form of cryptocurrency interest-earning accounts.

  • Investigation Date
    02/14/2022
  • Hypothetical Transgression
    Securities Violation
Main Event

BlockFi Agrees to Pay $100M

02/14/2022

U.S. Agency

The U.S. Securities and Exchange Commission announces a settlement with BlockFi entities in the amount of $100 million, for failing to register the offers and sales of its retail crypto lending product.

“In this first-of-its-kind action, the SEC also charged BlockFi with violating the registration provisions of the Investment Company Act of 1940. To settle the SEC’s charges, BlockFi agreed to pay a $50 million penalty, cease its unregistered offers and sales of the lending product, BlockFi Interest Accounts (BIAs), and attempt to bring its business within the provisions of the Investment Company Act within 60 days. BlockFi’s parent company also announced that it intends to register under the Securities Act of 1933 the offer and sale of a new lending product. In parallel actions announced today, BlockFi agreed to pay an additional $50 million in fines to 32 states to settle similar charges.”

See more on Factual Timeline

Initial Lawsuit

“This is a class action lawsuit on behalf of all people in the United States who enrolled in a BlockFi Interest Account/Crypto Interest Account, which is an unregistered security under state and federal law. Since March 4, 2019, BlockFi, through its affiliates has been, at least in part, funding its lending operations and proprietary trading through the sale of unregistered securities in the form of cryptocurrency interest-earning accounts. BlockFi refers to these unregistered securities as its “Crypto Interest Account” or the “BlockFi Interest Account” (BIAs).”
(see complaint for detailed class definition)

  • Filing Date
    03/01/2022
  • Public Offering Date
    03/04/2019
  • Transgression
    Securities Violation
  • Filing Firms
    Bursor & Fisher, P.A.
  • Case Title
    Mangano v. BlockFi
  • Docket Number
    2:22-cv-01112
  • Court
    New Jersey District Court
  • Free File
    Complaint

Allegations

“BlockFi allows investors to purchase the BIAs by depositing certain eligible cryptocurrencies into accounts at BlockFi. BlockFi then pools these cryptocurrencies together to fund its lending operations and proprietary trading. In exchange for investing in the BIAs, investors are promised an attractive interest rate that is paid monthly in cryptocurrency. The BIAs are not protected by Securities Investor Protection Corporation (SIPC) or insured by the Federal Deposit Insurance Corporation (FDIC).”

BlockFi did not register the BIAs with the United States Securities and Exchange Commission (“SEC”) or with the California Commissioner of Corporations (Commission). BlockFi offered and sold securities without a registration statement filed or in effect with the Commission and without qualifying for an exemption from registration; as a result, BlockFi violated Sections 5(a) and 5(c) of the Securities Act of 1933.

Defendants

  • Company
    BlockFi, Inc.
  • Company
    BlockFi
  • Company
    BlockFi Trading, LLC
  • Company
    BlockFi Lending, LLC

Lawsuit progression

  • Docket Number
    2:22-cv-01112
  • Court
    New Jersey District Court

The lead plaintiff deadline has passed, we will update this page as the lawsuit progresses.
Last event retrieved on 09/25/2022.

Factual Timeline

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