Cryptocurrency exchange Gemini, owned by the
Winklevoss twins, has agreed to a $5 million settlement to end a lawsuit with
the Commodity Futures Trading Commission (CFTC). The case, which alleged Gemini misled regulators to
launch a Bitcoin futures contract, was resolved just weeks before a trial was
set to begin.
In 2022, the CFTC filed a lawsuit in Manhattan
federal court, accusing Gemini of providing “false and misleading statements”
about how it would prevent Bitcoin price manipulation. These assurances were
central to Gemini’s efforts to secure approval for the first US-regulated
Bitcoin futures contract.
Allegations of Misleading Statements
US District Judge Alvin Hellerstein oversaw the case
and initially rejected Gemini’s request to dismiss it, ruling that a jury
should determine whether the statements made by Gemini executives were
misleading.
However, according to Bloomberg, the newly reached
agreement avoids a trial. Gemini settled without admitting or denying
liability. The settlement reflects the increasing regulatory challenges faced
by cryptocurrency platforms under the Biden administration.
Gemini Trust Company agreed to pay a civil penalty of $5 million to settle US Commodity Futures Trading Commission charges in connection with statements it made in connection with its bitcoin futures contract in 2017, a court filing showed https://t.co/AQ4mlWx4tm pic.twitter.com/t5p2GaFPBU
— Reuters Legal (@ReutersLegal) January 6, 2025
The government has ramped up efforts to assert control
over the crypto industry, filing numerous lawsuits and enforcement actions. Gemini’s
regulatory troubles extend beyond the CFTC case. The Securities and Exchange Commission (SEC) is pursuing a lawsuit against Gemini and crypto lender Genesis
Global Capital.
The SEC alleges the two firms raised billions in
crypto assets from investors illegally through their Gemini Earn program. In a
separate settlement earlier this year, Gemini agreed to return $1.1 billion to
customers under the supervision of New York regulators, further underlining its
ongoing legal and financial difficulties.
Political Context and Implications
The settlement’s timing coincides with a
politically charged backdrop. The trial was set to begin a day after Donald
Trump’s inauguration for his second presidential term.
Interestingly, Cameron and Tyler Winklevoss, Gemini’s
founders, each reportedly contributed the maximum allowable amount to Trump’s 2024 campaign, a move that aligns with the industry’s hope for more
crypto-friendly regulations under the new administration.
The Gemini case also ties to a related criminal
investigation initiated in late 2017 or early 2018. Although the probe, which
involved subpoenaed laptops from former executives, ended without charges, it
highlights the extent of legal scrutiny the exchange has faced.
This article was written by Jared Kirui at www.financemagnates.com.
Source link
