BlockFi $13.25M Securities Class Action Settlement

Consumers who invested, deposited or otherwise acquired assets in BlockFi interest-bearing accounts, including BlockFi interest accounts, BlockFi private yield or the BlockFi private client program, between Jan. 1, 2019, and Nov. 28, 2022, may qualify to claim a cash payment from a class action settlement.

BlockFi Inc. agreed to pay $13,250,000 to resolve a class action lawsuit alleging it issued unregistered securities and made misleading statements about its interest-bearing accounts and related products.

Who are the class members?

Class members must meet all of the following criteria:

• They invested, deposited or otherwise acquired assets in a BlockFi interest-bearing account (including BlockFi interest accounts, BlockFi private yield or the BlockFi private client program) between Jan. 1, 2019, and Nov. 28, 2022.
• Those investments or deposits directly injured them.
• Their relationship was direct with BlockFi (not through a mutual fund or other indirect investment vehicle).

Additional details:

• Those who redeemed, cashed out or closed their account during the class period may still be eligible as long as they had a direct relationship with BlockFi through a qualifying account.
• Only those with direct investments or deposits in BlockFi interest-bearing accounts qualify; indirect investors are not eligible.

How much can class members get?

Pro rata payment: The amount each class member can receive is based on a pro rata calculation. This means that after deducting attorneys' fees, costs, compensatory awards to plaintiffs and administrative expenses, the settlement administrator will distribute payments proportionally, depending on the value of each eligible BlockFi interest-bearing account as of Nov. 28, 2022 (the date BlockFi filed for bankruptcy), compared to the total value of all eligible accounts.

The settlement administrator will use the following formula to calculate each class member’s share: Pro rata share = (value of their BlockFi interest-bearing account as of Nov. 28, 2022) / (total value of all eligible BlockFi interest-bearing accounts) x net settlement fund

The settlement administrator will not make distributions to class members whose calculated payment is less than $10.

No action needed to receive payment

Class members do not need to submit a claim form to receive a payment. The claims administrator will use BlockFi’s records to determine eligibility and payment amounts and will automatically make payments to eligible class members unless they choose to exclude themselves from the settlement.

Payout options

The settlement administrator will distribute payments in a manner similar to the BlockFi Chapter 11 bankruptcy proceedings:

• USDC transfer to a matching Coinbase account (if applicable)
• Cash distribution through Digital Disbursements, which will email class members with payment options
• If the class member does not have a matching Coinbase account and does not respond to the email, the settlement administrator may attempt payment via Zelle or a check mailed to the address on file.

$13.25 million settlement fund breakdown

The $13,250,000 settlement fund covers:

• Settlement administration costs: Up to $100,000 before the effective date
• Attorneys’ fees and expenses and compensatory awards to plaintiffs: Up to $2,700,000
• Payments to eligible class members: The remainder of the fund

Important dates

• Exclusion deadline: Nov. 20, 2025
• Settlement hearing: Dec. 11, 2025

When is the BlockFi securities litigation payout date?

The settlement administrator will distribute payments to eligible class members after the court grants final approval of the settlement and resolves any appeals.

Why is there a class action settlement?

The class lawsuit alleged BlockFi and certain executives violated federal securities laws by issuing unregistered securities and making misleading statements about BlockFi interest-bearing accounts. The plaintiffs claimed BlockFi failed to register its interest-bearing accounts as securities and made misrepresentations about the safety and management of customer assets.

BlockFi denies all allegations of wrongdoing but agreed to settle to avoid the uncertainty and expense of further litigation.

Sources

1. Class notice
2. Settlement agreement
3. Settlement FAQ