A BlockFi investor has filed a complaint against BlockFi executives and crypto exchange Gemini for misleading customers.
In the class-action lawsuit, crypto investor Trey Greene said BlockFi violated the Securities Act by selling unregistered securities. According to him,
“The unregistered status of the BIAs deprived investors account holders of the type of information about BlockFi that would be required in SEC mandated disclosures.”
He added that BlockFi founders misled users about the liquidity of the assets held in BlockFi Interest Accounts (BIA).
Greene said he had invested over $1.5M worth of assets in BIA. However, the investor has been unable to liquidate his holdings. This is because BlockFi froze access to user accounts following FTX's collapse.
The plaintiff also claimed that Gemini exchange, which acted as BlockFi’s custodian, failed to inform clients about the lender's risk management practices. According to him, Gemini supplied misleading information to BlockFi that the latter used to falsely market BIA.
“Gemini and BlockFi’s representations were revealed to be materially false and misleading when it was disclosed in December 2022 that Gemini halted BlockFi client withdrawals because of liquidity problems at Genesis Global Capital.”
Greene demanded the firms repay his invested sum and the accrued interest that remain frozen on BlockFi’s platform. The plaintiff also seeks treble damages for violation of state laws, including the Exchange Act.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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