BlockFi $13 Million Settlement Moves Forward After Objection Withdrawn

By: Isha Das

In a significant development for the cryptocurrency lending company BlockFi, a United States court has signed off on a $13 million settlement, marking a pivotal step in a class-action lawsuit settlement process. This progression comes after a BlockFi investor decided to withdraw their objection, which had initially been filed in February.

A New Jersey judge recently gave preliminary approval for this $13 million settlement between a coalition of investors and BlockFi, ending months of stagnation. The much-anticipated judicial nod came from Judge Claire Cecchi of the US District Court for the District of New Jersey. Collectively, BlockFi's insurers are mandated to channel the settlement funds to an escrow account within a 30-day timeframe as stipulated by the court order. The order had experienced some delays, largely because of an objection from one of the investors that has since been rescinded.

This case arises from a broader context — namely, the tumultuous events set in motion by the collapse of Do Kwon's Terra ecosystem empire. The Terra crisis was a catalyst that reverberated throughout crypto lending platforms, inducing a 'crypto winter' in 2022, which in turn, contributed to BlockFi's unfortunate bankruptcy in November last year. The affected parties, consisting of approximately 89,000 users who maintained interest accounts with the company from March 2019 until the date of the bankruptcy, are potentially eligible to benefit from the settlement under discussion.

A date for the decisive final approval hearing has been earmarked for December 11, where the settlement strategy will be evaluated and any outstanding grievances from involved parties examined. The resolution of this settlement is hoped to mark a culminating point in ongoing repercussions from BlockFi's insolvency journey which, in part, emerged due to systemic financial disruptions in the cryptocurrency industry.

For further insights into BlockFi and its trajectory post-settlement, industry observers can visit BlockFi's official site for more updates and press releases from the company.