In its 2017 effort to be among the first to offer Bitcoin futures contracts, the exchange allegedly provided incorrect information verbally and in writing.
Thursday, the United States Commodity Futures Trading Commission (CFTC) filed a lawsuit against Gemini Trust Company in the New York Southern District Court. In the civil suit, the CFTC alleged that Gemini made false or misleading claims to the CFTC in 2017 through face-to-face meetings and in documentation, in violation of the Commodity Exchange Act and other rules.
The government was evaluating the prospective self-certification of a Bitcoin (BTC) futures contract whose price would be determined by an auction performed on Gemini’s digital asset trading platform.
The CFTC examined whether the proposed Bitcoin futures contract was subject to manipulation. The planned Bitcoin futures contract would have been one of the first futures contracts for digital assets.
Gemini is a cryptocurrency trading company founded by the Winklevoss brothers, Cameron and Tyler. It announced workforce reductions on Thursday and is preparing to lay off 10 percent of its employees in response to the bear market in cryptocurrencies.
The CFTC stated in a statement that it is seeking disgorgement of ill-gotten earnings, monetary fines, and injunctions against further violations of the Commodity Exchange Act pertaining to registration and trading.
Gretchen Lowe, the CFTC’s acting director of enforcement, said in a statement, “This enforcement action sends a clear message that the Commission will act to protect the integrity of the market monitoring process.”
Gemini told in a statement:
“Since its inception, Gemini has been a pioneer and proponent of sensible regulation. We have a track record of asking for permission, not forgiveness, and always doing the right thing for the past eight years. We anticipate conclusively demonstrating this in court.”
On December 10, 2017, Bitcoin futures began trading on the CBOE based on the price of the cryptocurrency on the Gemini exchange.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.