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Friday, January 27, 2023

BlockFi To Give Back Frozen Wallets

BlockFi, a startup that raised $350 million in recent funding and is embroiled in a legal dispute over frozen cryptocurrency assets, has filed a motion to dismiss a class-action lawsuit against it.

BlockFi, a startup that raised $350 million in recent funding and is embroiled in a legal dispute over frozen cryptocurrency assets, has filed a motion to dismiss a class-action lawsuit against it.

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BlockFi filed the motion on February 21st, according to court documents reviewed by Cointelegraph. The company did not immediately respond to a request for comment on Monday morning.

The complaint was filed by investors who claim they lost money because BlockFi’s founder Nick Sarillo allegedly withheld information about his company’s inability to unfreeze crypto assets from its customers’ accounts. The investors allege that Sarillo knew some of his customers were unable to access their funds but failed to disclose this fact until after they had invested in BlockFi products with those crypto assets as collateral.

BlockFi Initiates Returning Of Wallets

BlockFi is a startup that raised $350 million in recent funding and is embroiled in a legal dispute over frozen cryptocurrency assets.

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In February 2019, the company was sued by a class action lawsuit for freezing customers’ cryptocurrency assets. Four plaintiffs allege that BlockFi’s actions were “unlawful, unjust and unfair,” causing harm to users who had purchased the digital currency with fiat money. The plaintiffs are seeking damages for breach of contract, negligence and unjust enrichment among other claims.

In response to this lawsuit, BlockFi filed a motion to dismiss on May 30th alleging it had never been approved as an unlicensed depositary institution by New York regulators.

In the end, BlockFi looks to be in a tricky spot. On one hand, it has received considerable investment and seems to have been operating in good faith for some time now. On the other hand, there are many who feel that its actions have left them out of pocket and subject to unjustified fees. As such, it will be interesting to see how this case plays out over the next few months – particularly given that it could set a precedent for other crypto-related lawsuits if successful.

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