In a settlement, Gemini consented to pay $5 million to resolve the Commodity Futures Trading Commission’s (CFTC) lawsuit concerning allegations of misrepresenting Bitcoin futures. This comes as part of their ongoing legal disputes.
The cryptocurrency exchange, Gemini Trust Co., founded by the Winklevoss twins, has decided to pay a $5 million fine as part of a settlement with the Commodity Futures Trading Commission (CFTC). The lawsuit alleged that while attempting to introduce the first US-regulated Bitcoin futures contract, Gemini may have misled regulatory bodies, as reported by Bloomberg.
On Monday, it was disclosed that the proposed agreement aims to postpone a court trial scheduled for January 21st. This settlement is conveniently timed so as to eliminate the necessity of a trial, coinciding as it does with President Donald Trump commencing his second term in office on the same day.
Originating from the Winklevoss twins (Cameron and Tyler), Gemini reached an agreement with the Commodity Futures Trading Commission (CFTC) without either admitting or denying the pertinent allegations. The legal action initiated in 2022 when the CFTC filed a lawsuit against Gemini in a federal court in Manhattan. The CFTC alleged that Gemini made misleading statements about their strategies for preventing Bitcoin price manipulation, which were intended to be used as guidance for Bitcoin derivative products.
Gemini Settles with CFTC, Faces Lawsuit Over Security Issues and Crypto Misconduct
The US District Judge Alvin Hellerstein needs to give his approval for the proposed settlement. Previously, Gemini’s attempt to dismiss the case was denied by the judge in November. The judge stated that a jury would determine whether 32 statements made by Gemini executives were misleading. Neither the Commodity Futures Trading Commission (CFTC) nor Gemini have responded immediately to requests for comments regarding the settlement.
The Biden administration is working on setting regulations for cryptocurrencies, and this lawsuit is one of those efforts. Cryptocurrency proponents are optimistic that Trump’s administration might pave the way for more favorable industry guidelines in the future. Interestingly, the Winklevoss brothers, who support Trump, each donated $844,600 to his 2024 campaign.
In addition to this incident, Gemini has been involved in other legal disputes. In July 2024, Gemini reached a settlement with IRA Financial Trust due to a theft of funds caused by security vulnerabilities. A hacker manipulated the master key of the IRA at Gemini and drained the savings of elderly individuals.
The Securities and Exchange Commission (SEC) is currently involved in a lawsuit against Gemini. According to the SEC, Gemini, along with Genesis Global Capital, allegedly illegally amassed billions of dollars through the Gemini Earn program. Furthermore, Gemini has reached an agreement as part of a separate settlement with New York regulators to refund approximately $1.1 billion to customers.
Despite some ongoing legal challenges, Gemini remains one of the leading cryptocurrency exchanges. However, these court battles underscore the complexity and challenges faced by the cryptocurrency sector when dealing with intricate regulatory matters.
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2025-01-08 13:24