Gemini Exchange to Pay $5M Settlement to CFTC
Gemini, the New York-based cryptocurrency exchange co-founded by the Winklevoss twins, has reached a settlement with the U.S. Commodity Futures Trading Commission (CFTC) for $5 million. This agreement comes after the CFTC filed a lawsuit accusing Gemini of making misleading statements about the susceptibility of bitcoin futures to price manipulation.
Originally reported by Bloomberg, the settlement means Gemini avoids a trial that was scheduled for January 21. In the court documents filed recently, the company did not admit to any wrongdoing. Gemini was a key player in providing price data for the first-ever bitcoin futures contracts on the Cboe Futures Exchange in 2017. They also offer various digital asset services for cryptocurrencies, including bitcoin.
The CFTC alleged that Gemini provided false or misleading statements regarding a proposed bitcoin futures contract. The settlement, approved by U.S. District Judge Alvin Hellerstein, includes an injunction against Gemini from making any further misleading statements to the CFTC.
In addition to this settlement, Gemini faces regulatory challenges from other agencies. The Securities and Exchange Commission (SEC) has brought a lawsuit against them over their Earn product, where the company allegedly raised billions of dollars based on investors’ crypto assets. Gemini settled a lawsuit with the New York Attorney General’s office for $50 million in relation to the Earn program in June.
Gemini is not the only cryptocurrency company facing legal actions. Last year, Coinbase Global Inc. was sued by the SEC for allegedly operating an unregistered securities exchange. Another exchange, Kraken, agreed to pay a $30 million fine to the SEC and discontinued their crypto asset staking program in the U.S. Staking is a process where token holders earn rewards by locking up their tokens to support a cryptocurrency blockchain network.
These enforcement actions highlight the growing regulatory scrutiny in the cryptocurrency industry. Gemini’s settlement with the CFTC serves as a reminder that companies operating in this space must adhere to strict guidelines to ensure investor protection and market integrity.
