BlockFi Gets Court Approval To Return $300M To Customers

BlockFi, the cryptocurrency lender, has received court approval to return $300 million to its customers. This comes after a legal battle where BlockFi was able to win against its customers, thanks to a ruling from a New Jersey judge. The judge stated that assets sitting in the custodial wallets should be returned to the clients instead of being a part of the bankrupt crypto lender's estate. As a result, BlockFi custody wallet users have been authorized to receive around $300 million as a refund.

BlockFi, which is a crypto lending platform that allows users to earn interest on their cryptocurrencies, has been embroiled in a legal dispute with some of its clients for several months. The dispute began when a group of BlockFi clients accused the company of violating securities laws by offering interest-bearing accounts on cryptocurrencies that were not registered with the US Securities and Exchange Commission (SEC).

However, the New Jersey judge ruled that BlockFi's interest accounts were not securities. As a result, assets held in BlockFi's custodial wallets should be returned to the clients. This means that clients who had deposited cryptocurrencies in BlockFi's custodial wallets can now expect to receive their funds back.

The ruling is a significant win for BlockFi, which has been facing increasing regulatory scrutiny over its interest accounts. The company has been under investigation by various US regulators, including the SEC and the Commodity Futures Trading Commission (CFTC), over concerns that its interest accounts are unregistered securities.

Despite the legal battle, BlockFi has continued to expand its services. In August, the company launched BlockFi Rewards Visa Signature credit card, which allows users to earn bitcoin as a reward for their purchases. The company has also raised significant funding, with a $350 million Series D funding round earlier this year, which valued the company at $3 billion.

The ruling is a positive development for BlockFi and its customers, as it provides clarity on the legality of the company's interest accounts. It also shows that the company is committed to returning funds to its clients, even in the face of legal disputes.