- The Winklevoss twins and their cryptocurrency exchange, Gemini Trust Co., have been sued by investors in New York for alleged fraud.
- Brendan Picha and Max J Hastings claim in a class-action filing that Gemini offered high-interest rates to customers for lending them cryptocurrency assets, but did not register those assets as securities in accordance with US laws.
- The collapse of FTX created liquidity issues for Genesis Trading, which acted as Gemini’s borrower for a $900m program, leading to the shutdown of the Gemini Earn program and their refusal to honor investor redemptions.
Gemini Trust Co., a crypto exchange owned by Tyler and Cameron Winklevoss, has been sued by investors in New York for alleged fraud.
Brendan Picha and Max J Hastings have filed a class-action lawsuit in federal court in Manhattan, alleging that Gemini offered interest of up to 7.4% to customers for lending them crypto assets without registering them as securities in accordance with US securities laws.
According to Graeme Massie from The Independent, the lawsuit states that Gemini marketed these assets, known as GIAs, with “repeated false and misleading statements,” including that they were a secure way to earn interest.
It also alleges that when the company shut down its Gemini Earn program on November 16, after crypto platform FTX filed for bankruptcy, it refused to honor any further investor redemptions, effectively wiping out all investors who still had holdings in the program.
The lawsuit also claims that if the Gemini product had been registered as securities, investors would have been more aware of the risks involved and that Gemini’s duplicitous actions have led to “significant financial losses” for its investors.