• A class-action lawsuit was filed against Gemini and its founders Tyler and Cameron Winklevoss, alleging fraud and other crimes.
• Gemini had a high-yield program called Gemini Earn, a cryptocurrency savings account that offered interest in exchange for deposits.
• After the collapse of FTX, Gemini halted withdrawals for the interest-bearing contract, wiping out all investors with assets in the program.
Investors have filed a lawsuit against Gemini and its founders Tyler and Cameron Winklevoss, alleging fraud and other crimes. This comes after the collapse of FTX, a cryptocurrency exchange, caused a liquidity problem at Genesis Global Capital, which had $175 million invested in FTX prior to the bankruptcy filing.
Gemini is a U.S. cryptocurrency exchange that offers a high-yield program called Gemini Earn. This product works like a cryptocurrency savings account, allowing customers to deposit their cryptocurrency in exchange for interest. After the collapse of FTX, Gemini halted withdrawals for this interest-bearing contract, resulting in all investors with assets in the program losing their money.
The lawsuit filed against Gemini and the Winklevoss twins accuses them of violating the Exchange Act and accuses the twins and their crypto exchange of fraud. The class-action lawsuit, filed in Manhattan federal court, claims that Gemini offered unregistered securities in the form of interest-bearing accounts and refused to honor any further investor redemptions.
The lawsuit seeks to recover the lost funds for all investors who were impacted by Gemini and its high-yield program. It also seeks to hold the Winklevoss twins accountable for their alleged actions and to ensure that they don’t engage in similar conduct in the future. The lawsuit is ongoing and the results are yet to be determined.