• Investors have filed a lawsuit against Gemini and its founders Tyler and Cameron Winklevoss, accusing them of fraud and other crimes.
• The lawsuit filed on Tuesday claims that Gemini refused to honor any further investor redemptions.
• The lawsuit alleges that Gemini and the Winklevoss twins violated the Exchange Act and accused the twins and their crypto exchange of fraud.
Investors have filed a lawsuit against Gemini, a U.S. based cryptocurrency exchange, and its founders Tyler and Cameron Winklevoss, accusing them of fraud and other crimes. The lawsuit was filed on Tuesday in Manhattan federal court and alleges that the exchange offered unregistered securities in the form of interest-bearing accounts.
The lawsuit claims that Gemini created a high-yield program called Gemini Earn, which worked like a cryptocurrency savings account, allowing customers to deposit cryptocurrency and receive interest in return. However, the lawsuit states that after the collapse of FTX, Alameda Research, and other crypto companies last month, Gemini immediately halted withdrawals for the interest-bearing contract. This, the lawsuit claims, wiped out all investors who still had assets in the program.
The investors allege that Gemini and the Winklevoss twins violated the Exchange Act and accused the twins and their crypto exchange of fraud. The lawsuit further alleges that Gemini refused to honor any further investor redemptions and that the Winklevoss twins were aware of the liquidity problem at Genesis Global Capital, which had $175 million invested in FTX prior to the exchange’s bankruptcy filing.
The lawsuit seeks damages and other appropriate relief for the investors and the class of persons allegedly defrauded by the Winklevoss twins and Gemini. The investors are hoping that the court will rule in their favor and award them compensation for their losses. If the court rules in favor of the investors, it could be a major blow to the cryptocurrency industry.