BlockFi’s $13.2 Million Class Action Settlement Nears Final Approval in 2025

• What’s the Latest on BlockFi’s Settlement?
• How Will the Compensation Process Work?
• What Led to BlockFi’s Collapse?
• How Does This Fit Into the Larger Crypto Crisis?
• What’s Next for Affected Investors?
• Frequently Asked Questions

BlockFi’s $13.2 million class action settlement is on the verge of final approval after the last remaining objector withdrew their opposition. This paves the way for thousands of clients to recover funds lost in the crypto lender’s 2022 collapse. The settlement, initially proposed in February, resolves securities fraud claims against BlockFi’s founders and executives. Here’s what you need to know about the case, its implications, and how it fits into the broader crypto meltdown of 2022.

What’s the Latest on BlockFi’s Settlement?

The final hurdle to the settlement was cleared when Yacov Baron, the sole remaining objector, dropped his legal challenge. In a letter filed Wednesday, plaintiffs’ attorneys confirmed Baron’s withdrawal, allowing the settlement to MOVE forward. U.S. District Judge Claire Cecchi is expected to grant preliminary approval soon, enabling the distribution process to begin for nearly 89,000 clients holding BlockFi Interest Accounts (BIAs).

How Will the Compensation Process Work?

The settlement creates a claims process for BIA holders who lost access to their crypto assets during BlockFi’s bankruptcy. While most investors will participate in the class action, the agreement preserves their right to pursue individual claims if they believe they’re entitled to additional compensation. “This settlement represents one of the few concrete paths for recovery,” notes Navodaya Singh Rajpurohit of Coinque Consulting. “But those with unique circumstances can still file separate actions.”

What Led to BlockFi’s Collapse?

BlockFi’s downfall was part of the 2022 crypto contagion that wiped out several major firms. The company had marketed its interest-bearing accounts as SAFE alternatives to traditional bank accounts, promising yields on crypto deposits. In reality, BlockFi lent customer assets to high-risk third parties including Alameda Research, FTX’s trading arm. When TerraUSD collapsed in May 2022, it triggered a domino effect that exposed BlockFi’s precarious financial position.

How Does This Fit Into the Larger Crypto Crisis?

The 2022 crypto winter saw multiple platforms freeze withdrawals and declare bankruptcy:

• June 2022: Celsius Network halts withdrawals
• July 2022: Voyager Digital files for bankruptcy
• November 2022: FTX collapses in spectacular fashion

These interconnected failures revealed the risky lending practices permeating the industry. BlockFi’s case stands out because its founders—Zac Prince and Flori Marquez—had explicitly assured customers their deposits were secure.

What’s Next for Affected Investors?

With preliminary approval imminent, class members should prepare to submit claims. The settlement administration will provide detailed instructions on documentation requirements. Meanwhile, individual claimants must weigh whether to opt out of the class action before the deadline. According to court documents, the settlement fund will be distributed proportionally based on account balances as of BlockFi’s bankruptcy filing.

Frequently Asked Questions

Who is eligible for compensation under the BlockFi settlement?

Nearly 89,000 holders of BlockFi Interest Accounts (BIAs) as of the company’s bankruptcy filing qualify for compensation through the class action settlement.

Can I still file an individual lawsuit if I participate in the settlement?

No. By participating in the class action, you waive your right to pursue separate legal action regarding the same claims covered by the settlement.

How much can claimants expect to recover?

Exact recovery amounts will depend on total valid claims filed, but the $13.2 million settlement represents a fraction of total losses. Individual recoveries will be proportional to account balances.

When will payments be distributed?

Payments will begin after the settlement receives final approval and the claims process concludes, likely in late 2025 or early 2026.