Gemini faces lawsuit for violating the U.S. Exchange Act Gemini faces lawsuit for violating the U.S. Exchange Act
The exchange allegedly didn't register its interest-bearing accounts as securities.
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Updated: Dec. 29, 2022 at 8:44 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto exchange Gemini and its founders, the Winklevoss twins, are facing a class-action lawsuit for allegedly not registering their interest-bearing accounts as securities and thereby violating the U.S. Exchange Act, according to a Tweet by crypto influencer ODELL.
The investors filed the lawsuit in the U.S. District Court for the Southern District of New York on Dec. 27. Referring to the interest-bearing accounts that Gemini offered according to the investors, the lawsuit states:
“Gemini marketed GIAs with repeated false and misleading statements, including that GIAs were a secure method of collecting interest.”
The investors also claimed that the exchange withheld information concerning the risks associated with Gemini Earn and its partners related to the program.
Gemini promised up to 8% returns on investment, which it failed to provide due to Genesis Global’s liquidity issues resulting from the FTX collapse. On Dec. 5, the exchange formed a committee to tackle the liquidity problem affecting the Gemini Earn users.
In response, Gemini told Forbes that the exchange is “committed to providing a secure and compliant platform for our customers” and will be “vigorously defending itself against these baseless allegations.”
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Zeynep Geylan
Zeynep is an academic who turned to crypto in 2018. Originating in social sciences, she is especially interested in the social impact of blockchain and cryptocurrencies and strongly believes in their transmuting power.
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Gemini dollar (GUSD) combines the creditworthiness and price stability of the U.S.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Cameron Winklevoss, a renowned figure in the cryptocurrency sector, is a Harvard University graduate with a degree in Economics and holds an MBA from Oxford University.
Tyler Winklevoss, known for his pioneering role in the cryptocurrency realm, is a Harvard University alumnus with a degree in Economics and holds an MBA from Oxford University.