Legal Remedies for Crypto Exchange Users Locked Out of Wallets and Accounts
1-800-LAW-FIRM is reviewing potential lawsuits involving investors large and small who have lost tens of billions of dollars to cryptocurrency exchanges in recent months. Most notably, FTX and its founder, Sam Bankman-Fried, have produced global headlines in their epic spiral into bankruptcy and perhaps criminal accountability. But the problems extend well beyond FTX. Our team is investigating how other platforms overplayed the financial strengths of their companies to consumers while hiding risks.
If you have lost money to a cryptocurrency exchange that misrepresented its financial strengths while downplaying risks, you may be eligible to file a lawsuit against them. Schedule a no-obligation, free claim review with a member of our team by filling out the following form.
FREE CLAIM REVIEW
Have you LOST money on a cryptocurrency exchange?
Investors Have Paid a hefty price for the alleged mischaracterization of investments at cryptocurrency exchanges. Here are a few examples
FTX EXCHANGE
FTX is one of many cryptocurrency exchanges that allow customers to trade digital currency for other assets, such as other cryptocurrencies or even conventional money. FTX has been accused of embezzling customer assets and/or using them for illegal purposes. Bankman-Fried has been charged with wire fraud, securities fraud, lying to investors, and other charges. Investors who held their money in FTX’s exchange lost billions of dollars. The collapse has led to disruption and major concerns about other exchanges, and whether they, too, lied to consumers.
Gemini EXCHANGE
Gemini, for example, is an exchange that offers a product called “Gemini Earn,” which allowed lenders to lend their currency to institutional partners. The company allegedly advertised that investors could earn interest on the crypto they loaned to others, meaning they could make a profit.
But attorneys investigating the exchange say Gemini’s lending partner, Genesis, was not financially sound and was riskier than represented. Unfortunately, Genesis, now on the brink of bankruptcy, has frozen all Gemini Earn accounts, resulting in a loss of nearly $1 billion in digital assets. Genesis misrepresented material facts concerning its financial strength and its risk portfolio and has inappropriately frozen account withdrawals. On its part, it is alleged that Gemini failed to protect its customers by, among other things, performing an adequate audit of Genesis’s financial condition before partnering with Genesis as its lending partner.
BLOCKFI EXCHANGE
Another exchange, BlockFi, also recently filed for bankruptcy protection. Employees at the exchange warned of credit risks, but executives ignored the warnings and misrepresented its portfolio risk to its customers. The Securities and Exchange Commission found that BlockFi violated security laws by making false and misleading statements for more than two years concerning the level of risk in its portfolio and lending activities. But BlockFi is blaming its financial woes on FTX and “crypto market volatility.” As a result of the SEC’s charges, BlockFi agreed to pay $100 million in penalties, cease its unregistered offers and sales of its lending product.
At best, these exchanges misrepresented the financial strengths of their companies while downplaying their portfolio risks. At worst, these exchanges were nothing more than sophisticated Ponzi schemes that stole billions of dollars from their customers. In either case, large institutional and smaller retail investors alike have lost tens of billions of dollars.
Have you lost money or assets after lending currency on a cryptocurrency exchange platform?
If so, you may qualify to participate in a cryptocurrency exchange lawsuit investigation. Fill out the form on this page for more information.