Gemini crypto exchange agrees to pay $5M settlement to CFTC

Gemini Trust Co. LLC, a New York-based cryptocurrency exchange founded by the Winklevoss twins in 2014, has agreed to pay a $5 million civil penalty to settle a lawsuit filed by the U.S. Commodity Futures Trading Commission over allegedly misleading statements it made about how easy it was to Bitcoin futures price can be manipulated.

Bloomberg first reported by settlement. Court documents filed by the exchange on Monday will avoid a trial that was expected to begin. January 21. In the settlement, Gemini neither admitted nor denied wrongdoing.

Gemini acted as price data for the Bitcoin value markets for the first-ever Bitcoin futures contracts traded on the Cboe Futures Exchange in 2017. Gemini also provides digital asset services for cryptocurrencies, including Bitcoin, such as storage and currency exchange.

According to the CFTC, V time According to the 2022 lawsuit, Gemini “knew or reasonably should have known” that the company’s statements were false or misleading about its proposed bitcoin futures contract product and how it could be subject to manipulation.

Settlement was approved U.S. District Judge Alvin Hellerstein, who initially denied Gemini’s request to dismiss the lawsuit and ruled that a jury should determine the outcome. Part of the settlement included an injunction prohibiting Gemini from making any further false or misleading statements to the CFTC.

Gemini is among several companies facing enforcement action in the US, and currently facing suit by the Securities and Exchange Commission on its Earn product. The Securities and Exchange Commission (SEC) said that through the Gemini Earn program, the company illegally raised billions of dollars based on investors’ crypto assets. In June, the company settled a lawsuit with the New York Attorney General’s Office for $50 million over the Earn program.

Other notable enforcement actions include the SEC’s 2023 Act. lawsuit against Coinbase Global Inc.A main cryptocurrency exchange, claiming that the exchange operates an unregistered securities exchange. Cryptocurrency exchange Kraken also agreed to pay a fine of $30 million the same year to the SEC and closed its crypto asset staking program in the United States. Staking is a process in which holders of crypto tokens earn rewards by locking up their tokens for a certain period to support the cryptocurrency blockchain network, similar to earning interest.

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