Winklevoss Twin's Gemini Sued Over Failed 2017 Attempt to Launch Bitcoin Futures

Gemini Trust Company LLC is getting sued by the Commodity Futures Trading Commission (CFTC) because Gemini allegedly misguided regulators with "false or misleading statements and omissions." The 28-page civil suit is regarding Gemini's failed attempt to launch the world's first Bitcoin futures contracts in early 2017. 

The published CFTC documents claim that Gemini modified "information conveyed or omitted to Commission staff by Gemini directly." If these statements are true, they would violate the "Commodity Alternate Act" and the "Commodity Exchange Act," according to the same CFTC filing.

The alleged shady communication skills weren't without reason either. The 2017 filing "was particularly significant because it was to be among the first digital asset futures contracts listed on a designated contract market, at a time of fervent interest by market participants in obtaining exposure to bitcoin through the derivatives markets," according to a CFTC regulator.

The lack of transparency seems to be covering substantial issues as well. CFTC documents state the proposed platform was "readily susceptible to manipulation." Gemini claimed to CFTC staff that it would operate a "full reserve exchange," and that all transactions were "fully prefunded." According to the suit, these statements "omitted material information" and "contained false and misleading statements." 

Gemini responded in a recent statement, "Gemini has been a pioneer and proponent of thoughtful regulation since day one. We have an eight-year track record of asking for permission, not forgiveness, and always doing the right thing.” It appears they will fight the suit when he concluded the statement by saying, “We look forward to definitively proving this in court."

According to an internal notice last Thursday, Gemini is preparing to fire 10% of employees to help soften the burden of the recent crypto downturn.

The full 28-page suit is visible here

Author: Garrett Meifert

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