CFTC Charges Gemini Trust Company for False Statements and Omissions to the Commission

The Commodity Futures Trading Commission (CFTC) on June 2 announced it has filed a complaint in the U.S. District Court for the Southern District of New York against Gemini Trust Company, LLC, for making false or misleading statements of material facts or omitting to state material facts to the CFTC in connection with the self-certification of a bitcoin futures product.

New York-based Gemini is a cryptocurrency exchange and custodian that allows customers to buy, sell, and store digital assets. It was founded in 2014 by Cameron and Tyler Winklevoss. It is also the world’s first SOC 1 Type 2 and SOC 2 Type 2 certified crypto exchange and custodian.

The complaint alleges that from approximately July 2017 to around December 2017, Gemini, directly and through others, made false or misleading statements of material facts, or omitted to state material facts, to the CFTC during an evaluation of the potential self-certification of a bitcoin futures contract by a designated contract market (DCM). The proposed bitcoin futures contract was to be settled by reference to the spot bitcoin price on the relevant day as determined by an auction held on Gemini’s digital asset trading platform (Gemini Bitcoin Auction).

According to the complaint, Gemini, directly and through the DCM, provided information to the CFTC concerning Gemini’s trading platform and the Gemini Bitcoin Auction, and certain statements and information conveyed or omitted by Gemini were false or misleading.

The suit is seeking to block Gemini, as well as its affiliates, from trading commodities and conducting any further investments, in addition to monetary fines.

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Also on June 2, Cameron and Tyler Winklevoss announced they would be laying off 10% of the company staff, citing a “contraction phase”, known as “crypto winter” in the cryptocurrency industry.