On June 2, CFTC filed a lawsuit against Gemini, CFTC claimed that Gemini reportedly withheld material facts and provided false information to the regulator while evaluating the new product between July and December 2017. The allegations also include claims about the firm’s pursuit of a Bitcoin (BTC) futures contract in 2017. As per the CFTC During the continuing evaluation of the self-certification of a BTC futures contract, Gemini made misleading claims to the CFTC.
The legal contract to buy or sell Bitcoin at a future date was resolved using the Gemini auction’s current price.
What was the matter?
The primary question being investigated is whether the BTC auction and future contracts were manipulated. As per the Gemini’s oral and written communications to the Commission, the exchange was a full reserve exchange.
The issue revolves around regular auctions that took place on Gemini’s cryptocurrency platform to decide the payouts that futures contract buyers and sellers would get. Market makers on Gemini’s platforms were given loans in order to enable trading on the exchange and in the auction system that determined the settlement price for bitcoin futures contracts.
The Gemini allegedly also offered customized trading charge refunds to some participants, which were not available to other traders and were not disclosed to the public. The cost of capital for merchants increased as a result of this.
According to the CFTC, these incentives may be and at times were utilised by customers to participate in collusive, non-bona-fide, wash, or self-trading.
The CFTC is seeking redress from Cameron and Tyler Winklevoss’ crypto exchange for making profits through deceptive techniques. The complaint claims that Gemini violated civil monetary fines and administrative requirements pertaining to registration and trading. The CFTC is seeking civil monetary penalties as well as other remedies such as trading and registration prohibitions.
Response from Gemini
Cameron and Tyler Winklevoss took to Twitter to express their dissatisfaction with this assertion. They called it ridiculous.
Nuts! We obviously disagree with this lol. Will respond more fully when I have a minute. Busy building at the moment. https://t.co/pvZ4dWuqtI
— Tyler Winklevoss (@tyler) June 2, 2022
Meanwhile, according to the complaint, Gemini officials were aware that such claims were inaccurate and deceptive in advance.
The civil suit comes at the time when US and international regulators tighten their grip on the cryptocurrency business, which has exploded in popularity in recent years and is now more tightly linked to mainstream finance.
