Gemini Cryptocurrency Platform Accused of Lying to US Regulator

 

According to the lawsuit, Gemini's representatives have failed to provide the CFTC with adequate information to assess whether the bitcoin futures contract the company sought to approve was easily tampered with.

A regulator of the US financial markets accused the platform specialized in cryptocurrencies Gemini, founded by the brothers Cameron and Tyler Winklevoss, of having lied to him during the authorization process of a financial product based on bitcoin.

CFTC, the agency that regulates the commodity futures markets in the United States but also bitcoin, filed a complaint against Gemini "for making false or misleading statements" and "for failing to share material facts" with the CFTC during this certification in 2017.

This measure "clearly indicates that the agency will act to ensure the integrity of the market supervision process," one of its managers, Gretchen Lowe, said in a statement.

According to the lawsuit, Gemini's representatives have failed to provide the CFTC with adequate information to assess whether the bitcoin futures contract the company sought to approve was easily tampered with.

Gemini proposed that the closing price of the contract, which would be traded on an official platform, be based on bitcoin prices on its own specialized cryptocurrency platform.

It is one of the first bitcoin financial products of this nature to be evaluated by the CFTC, which was trying to set standards at the time.

Contacted by AFP, the agency did not specify whether the contract raised in its complaint is the one that Gemini launched in December 2017 on the Chicago Options Exchange (Cboe), one of the two futures exchange platforms in the United States.

Gemini did not immediately respond to an AFP request.

It was the second blow on Thursday for the Winklevoss brothers' company, which had announced earlier in the day that it was cutting 10% of its workforce due to severe turbulence in the cryptocurrency markets.

Known for claiming ownership of Facebook before building a small fortune from their Bitcoin investments, the Winklevosses launched Gemini in 2015.