Investors Sued on Gemini Crypto Exchange
2022.12.28 12:39
Investors Sued on Gemini Crypto Exchange
Budrigannews.com – The interest-earning program Gemini Earn is said to be the subject of a new lawsuit brought by investors against Gemini’s founders, Tyler and Cameron Winklevoss.
According to a Bloomberg report, disgruntled investors have filed a lawsuit against the founders of Gemini, alleging that the company engaged in fraud and violated securities laws.
The complaint, which was filed on December 27 in federal court in Manhattan, states that the Winklevoss brothers refused to “honor any further investor redemptions” after stopping those redemptions due to exposure to Genesis Global Capital, a troubled trading firm.
The plaintiffs claimed that because the products had not been registered, they were unable to receive disclosures that would have allowed them to better evaluate the risks associated with Gemini Earn. The Gemini Earn platform, which debuted a year ago, was made to earn as much as 8% interest on crypto holdings.
Midway through November, or shortly after the initial reports indicated FTX’s liquidity issues, Gemini began experiencing major issues on Gemini Earn.
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Gemini Earn remains unavailable to users because the platform has millions of dollars stuck on Genesis since it stopped allowing withdrawals in November. Some reports claim that Gemini clients owe up to $900 million to Crypto lender Genesis and its parent company, Digital Currency Group (DCG).
Cameron Winklevoss made the announcement on December 20 via Twitter that Gemini had devised a strategy on behalf of the creditor committee to resolve the liquidity issues at Genesis and DCG and recover the assets.
Earn Update: Today, Houlihan Lokey presented a plan on behalf of the Creditor Committee to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of assets.
— Cameron Winklevoss (@cameron) December 20, 2022
In a letter to customers on December 7, Genesis stated that the withdrawal freeze would likely last a few weeks to find a way to recover users’ assets. On November 16, the company stopped taking withdrawals, citing the “unprecedented market turmoil” brought on by FTX’s collapse.
