On Tuesday, investors filed a lawsuit in federal court in Manhattan against Gemini Trust Co. and its founders, Tyler and Cameron Winklevoss. As reported by Bloomberg, investors have filed a lawsuit against the Winklevoss twins on allegations that they sold interest-bearing accounts without first registering them as securities.
Gemini sued for securities fraud
According to the report, the investors who filed the complaint claimed that the company and the Winklevoss twins committed fraud in operating its cryptocurrency exchange and breached the terms of the Exchange Act.
For the benefit of themselves and “others similarly situated,” investors Brendan Picha and Max J. Hastings have launched a class action complaint in the U.S. Southern District Court of New York. According to the lawsuit, the defendants want to be tried before a jury.
According to the filing, on or around November 16, Gemini unexpectedly shut down the program because its borrower, Genesis Trading, had a liquidity crisis after the collapse of fellow cryptocurrency exchange FTX.
Investors stated in the complaint that Gemini did not satisfy further redemption requests. They said the cryptocurrency exchange wiped off all investors’ funds on the Earn platform. Furthermore, the investors stated that registration would have allowed them to analyze the risks properly.
In a Dec. 23 website posting, the firm stated that it is working with “utmost urgency” to fix Genesis’ liquidity difficulties and that “we will continue to work on your behalf around the clock through the holidays.”
FTX’s demise has resulted in enormous losses for Genesis Global. There is an outstanding debt of $900 million from Genesis Global to Gemini Exchange. This led the cryptocurrency exchange to form a creditors committee in an effort to get their money back from Genesis Global. The cryptocurrency trading platform is revising its operations to make it easier for customers to withdraw their funds.
