The authors of the lawsuit, filed in New Jersey District Court, allege that Zac Prince defrauded customers and abused his authority.
Creditors allege former BlockFi administration deliberately delayed bankruptcy case and compensation for investors. Goal: to have time to negotiate a senior management release related to loans previously made to
FTX cryptocurrency exchange.
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“It’s time to find out what BlockFi really is, who Zach Prince really is, how much he personally received from the company, and what he and some of his colleagues did when no one was controlling them,” the accompanying letter to the lawsuit reads.
In addition to the direct allegations against the former CEO, UCC BlockFi is asking the court to revoke an exclusivity document. The document gave previous management permission to lead internal bankruptcy management because of their knowledge of the company. The committee argues that the performance evaluation gives the impression that BlockFi insiders are enriching themselves at the expense of creditors, while the company is not generating revenue.
Earlier, it was reported that the U.S. Securities and Exchange Commission (SEC) had agreed to
to waive some of the penalties imposed in the cryptocurrency lender’s bankruptcy proceedings and allowed the funds to be used to reimburse investors.