Investor Files Class Action against BlockFi, Founder, Directors, and Gemini

03/02/2023 06:13 • Metaverse Matters • 145 views

On March 2, an investor who was frozen nearly US $2 million in BlockFi, a bankrupt cryptocurrency lending institution, filed a class action against its founder, two directors and Gemini, the cryptocurrency exchange.

The investors who have been frozen $2 million have filed a class action lawsuit against BlockFi executives and Gemini

Interpret the above information:

The cryptocurrency industry continues to face a lot of issues, and the latest of them is the filing of a class-action lawsuit against BlockFi by an investor who froze nearly US $2 million. BlockFi is a cryptocurrency lending institution that filed for bankruptcy in 2021, and the investor believes that the founder, two directors, and Gemini, the cryptocurrency exchange, are responsible for the freezing of his funds.

According to reports, the lawsuit was filed on March 2, and it accuses the defendants of mishandling funds, breach of contract, breach of trust, and negligence. The investor alleges that BlockFi, its founder Zac Prince, directors Rene van Kesteren and Flori Marquez, and Gemini, which provided custody services for BlockFi, caused the freezing of his funds through their actions, or lack thereof.

The lawsuit cites that BlockFi promised to provide high-interest returns on deposits through its cryptocurrency lending and trading platform, but instead, it gambled those funds in speculative and risky trades. This behavior, according to the lawsuit, led to the decline in the value of the funds, which ultimately led to the bankruptcy of the company. The investor claims that this was a violation of the terms of the agreement between him and BlockFi.

The lawsuit also claims that the defendants failed to safeguard the investor’s funds despite their fiduciary duties to do so. The investor alleges that BlockFi and the defendants allowed the funds to be stored on Gemini’s platform, which did not have adequate security measures.

In conclusion, the class-action lawsuit filed against BlockFi, its founder, directors, and Gemini raises concerns about the increasing number of financial mishaps within the cryptocurrency industry. The lawsuit highlights the importance of investors doing their due diligence before investing in any cryptocurrency company. It also underscores the need for the industry to put in place strict regulations to protect investors’ funds.

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