The Commodity Futures Trading Commission (CFTC) has announced a new lawsuit against the Gemini Exchange in New York. The agency is accusing the crypto platform of providing misleading information so it could obtain permission to launch the first U.S.-based bitcoin futures contract.
Gemini Has Landed in Hot Water
Gemini is accused of providing false information between the dates of July and December 2017 regarding how it would potentially prevent manipulation of the bitcoin price for the derivatives the company was seeking to provide. The CFTC is hoping to garner fines from Gemini. It also seeks to impose temporary bans on the firm’s future registration and trading processes.
The lawsuit documents claim:
Digital asset loans, particularly unsecured or at low or below-market rates, could reduce traders’ cost of capital – and the cost of manipulative conduct – and thus potentially undermine a purported rationale as to why the bitcoin futures contract was not readily susceptible to manipulation.
Gemini has been stirring quite a bit of controversy as of late. The exchange’s founders Cameron and Tyler Winklevoss recently announced that due to the “crypto winter” they are convinced is coming and the fact that the prices of all the world’s major cryptocurrencies continue to take major dips, the company is going to be laying off roughly ten percent of its staff, thus reducing its employee count from about 1,000 to 900.
Given that the company has closed its physical New York office, the founders say that all layoff discussions will be occurring via Zoom. In a memorandum on its website, Gemini explained:
To that end, we have asked team leaders to ensure that they are focused only on products that are critical to our mission and assess whether their teams are right sized for the current, turbulent market conditions that are likely to persist for some time… Today is a tough day, but one that will make Gemini better over the long run. Constraint is the mother of innovation, and difficult times are a forcing function for focus, which is critical to the success of any startup.
The regular falling of crypto prices appears to be affecting other exchanges and crypto-based firms as well. Recently, Coinbase announced that despite plans to expand its team heavily throughout 2022, the company will now be taking a break from all hiring procedures, though no steps have been taken to lay any current employees off.
We’ll Fight to the End
Reacting to the recent suit and the respective allegations, the company explained that it would be fighting its hardest in court, claiming a statement:
We have an eight-year track record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court.
In 2015, Gemini became one of the first crypto-related businesses to earn a BitLicense.