Gemini Finds Itself in Court in Relation to the 2017 Bitcoin Futures Case

XRP Price Shatters $1 With Potential To Skyrocket 400% To $5, But These Meme Coins Could Soar Even Higher

Best Meme Coins to Invest In Now, November 16 – Floki, Feed Every Gorilla, Book of Meme

On Thursday, Commodity Futures Trading Commission (CFTC) filed a suit against Gemini Trust Company LLC Thursday based on claims that the platform’s staff has supplied the federal regulator with misinformation. These allegations come in light of the 2017 trading launch by Gemini of its much-awaited, historic contract involving Bitcoin (BTC) futures.

Buy Bitcoin on eToro Now

Your capital is at risk.

Background of the Gemini-CFTC Suit

In a civil claim spanning over twenty-eight pages, the regulator brought this suit due to being blatantly misled by Gemini.

The exchange platform, owned and controlled by the Winklevoss siblings, was accused of providing the CFTC with answers that were inherently misleading in nature, about the price of a BTC futures contract and the ways it could be subject to manipulation, in 2017. The regulator seriously accused the platform of supplying them with “false or misleading statements and omissions” pertaining to the company’s meetings.

The Winklevoss Twins

The CTFC in its suit elaborated that the misinformation provided by the platform was in direct contravention to the Commodity Exchange Act and was material in evaluating the nature of the proposed BTC futures contract. The statements as supplied by the company were relevant to the assessment process and had a direct effect on the market, investors, users of the platform and participants of the Gemini BTC Auction.

The CFTC arrived at the conclusion that such a proposal was incredibly vulnerable to manipulation at the hands of the platform, and would, in essence, facilitate duping honest investors.

Buy Bitcoin via FCA Regulated eToro Now

Your capital is at risk.

What are the Allegations on Gemini?

The regulator alleged that Gemini had, in its communication to the body, misrepresented itself as an exchange platform that could be classified as ‘full reserve’, and that all relevant transactions would effectively be completely ‘pre-funded’.

On the basis of these claims, Gemini claimed to the Commission that the ‘pre-funded’ nature of such contracts would make it less vulnerable to manipulation as it had substantially increased trading costs and would hence make industry malpractices inconvenient and more expensive.

The CFTC accused Gemini of attempting to reduce trading costs to bolster trading volumes, and one such method was by loaning hundreds of thousands of Bitcoin to traders, to incentivize them to participate in the launch.

According to the Commission, Gemini had also reportedly allowed some customers some advances, permitting them to instantly trade through their accounts before they could even be fully funded.

The CFTC also debunked Gemini’s claim and prevention mechanism that did not allow traders to conduct trades with themselves.

However, the suit does not, in any form, mention if there is any correlation to Gemini’s collaboration with CBOE during the launch period.

Response of Gemini and CFTC

In response, a representative of the Gemini team defended their actions by substantiating the platform’s commitment and dedication to following laws and regulations. The spokesperson claims that the platform was granted all relevant permissions after taking due care of procedural requirements; the speaker was also incredibly confident of Gemini’s victory in court.

Invest in Bitcoin via FCA Regulated eToro Now

Your capital is at risk.

An official of the CFTC, Gretchen Lowe, in her statement to the press emphasized on the importance of financial integrity, fair competition and market protection. The blatant misinformation as peddled by Gemini, is, according to the CFTC an attack on the very principles of the body and is contributive to undermining the oversight process.

Lucky Block – Our Recommended Crypto of 2022