In a significant development for BlockFi investors, a U.S.District Judge has been called upon to approve a $13.2 million class action settlement.
This follows the withdrawal of the last objection from Yacov Baron, paving the way for approximately 89,000 investors to potentially receive compensation for their inaccessible funds during the company's tumultuous collapse in November
2022.
The collapse, deeply intertwined with the failures of the FTX exchange and other high-profile crypto mishaps, has left many investors seeking recourse.
This article delves into the background of the BlockFi debacle, the specifics surrounding the settlement, and what this means for affected investors.
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Key Takeaways
- BlockFi investors are nearing a $13.2 million class action settlement after the last objection was withdrawn.
- The settlement will benefit approximately 89,000 investors whose funds were inaccessible during BlockFi's collapse.
- Legal experts advise victims of investment scams to pursue legal action as blockchain tracing technology improves recovery options.
Background of the BlockFi Collapse
In light of recent developments, the collapse of BlockFi in November 2022 serves as a critical case study in the volatile world of cryptocurrency lending.
Following its substantial exposure to the notorious FTX crypto exchange, BlockFi faced a severe liquidity crisis that significantly impacted its 89,000 investors.
Now, with a proposed $13.2 million class action settlement on the horizon, a U.S.District Judge has been urged to approve the deal, which will provide compensation for BlockFi Interest Account holders whose access to funds was halted during the debacle.
The lead plaintiffs announced that the last objector, Yacov Baron, has withdrawn his objections, marking a significant step toward distributing compensation.
The settlement, designed for U.S. holders of BlockFi interest accounts from March 2019 to November 2022, is now expected to move toward a swift resolution and notifications for class members.
Despite Baron's previous assertions that the proposed arrangement was 'grossly unfair,' his retraction might signal a moment of resolution for affected investors.
It is worth noting that while over 10,000 individuals have opted out of bankruptcy protections to pursue individual claims, this settlement holds the potential for a more equitable distribution of funds among the majority of victims.
As the cryptocurrency market continues to grapple with systemic risks and regulatory challenges, the evolution of blockchain tracing technologies offers hope that those impacted by scams like BlockFi may have recourse to reclaim their lost investments.
Details of the Settlement and Implications for Investors
The recent developments in the BlockFi case highlight critical implications for investors navigating the aftermath of cryptocurrency scandals.
With the class action settlement of $13.2 million gaining traction following Yacov Baron's withdrawal of objections, approximately 89,000 investors could soon see compensation for losses incurred when their accounts were frozen during BlockFi's tumultuous collapse.
This settlement extends to U.S.holders of BlockFi interest accounts dating back to March 2019, aiming to provide a degree of financial relief amidst the broader crisis affecting the crypto lending sector, intensified by the failures of other major players like FTX and TerraUSD.
The legal framework surrounding this case stands as a testament to the shifting dynamics of investor protection in the rapidly evolving world of digital assets, suggesting that those impacted by the cryptocurrency's inherent volatility may benefit from a more collaborative approach to legal remedies in the future.
By Wolfy Wealth - Empowering crypto investors since 2016
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