CFTC sues Gemini claiming crypto exchange lied in futures contract evaluation

Published at: June 2, 2022

The United States Commodity Futures Trading Commission (CFTC) filed suit against Gemini Trust Co. in the U.S. Southern District Court of New York on Thursday. The CFTC claimed in the civil suit that Gemini made false or misleading statements to the CFTC in 2017 during in-person meetings and in documents, violating the Commodity Exchange Act and other regulations. 

The agency was making an evaluation of the potential self-certification of a Bitcoin (BTC) futures contract to be based on the spot Bitcoin price determined by an auction held on Gemini’s digital asset trading platform.

The CFTC was considering whether the proposed Bitcoin futures contract would be susceptible to manipulation. The proposed Bitcoin futures contract would have been among the first digital asset futures contracts listed.

Gemini is the cryptocurrency trading platform founded by brothers Cameron and Tyler Winklevoss. It announced staff cuts Thursday and is preparing to lay off 10% of its workers due to the crypto market downturn. 

The CFTC said in a statement that it is seeking disgorgement of ill-gotten gains, monetary penalties and injunctions relating to registration and trading and against further violations of the Commodity Exchange Act. 

Related: Bipartisan bill to give CFTC authority over exchanges and stablecoins

“This enforcement action sends a strong message that the Commission will act to safeguard the integrity of the market oversight process,” CFTC acting director of enforcement Gretchen Lowe said in the statement.

Gemini told Cointelegraph in a statement: 

“Gemini has been a pioneer and proponent of thoughtful regulation since day one. We have an eight year track-record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court.”

Bitcoin futures began trading on the CBOE on December 10, 2017, based on the price of the cryptocurrency on the Gemini exchange.

Tags
Bitcoin
Regulation
Cryptocurrency Exchange
Bitcoin Futures
Futures
Cftc
Gemini
Related Posts
The CFTC’s action against Gemini is bad news for Bitcoin ETFs
On June 2, 2022, the United States Commodity Futures Trading Commission (CFTC) initiated an action against Gemini, the crypto exchange founded by billionaire twins Tyler and Cameron Winklevoss. Among other things, the complaint alleges that Gemini made a number of false and misleading statements to the CFTC in connection with the potential self-certification of a Bitcoin futures contract, the prices for which were to be settled daily by an auction (the “Gemini Bitcoin Auction”). In the complaint, the CFTC specifically articulated the position that these statements were designed to mislead the commission as to whether the proposed Bitcoin futures contract …
Etf / June 12, 2022
Cryptocurrency: The future of futures?
Many traders entering cryptocurrency markets from traditional finance may look to derivatives as vehicles for price speculation and hedging. There are plenty of choices when it comes to exchanges and instruments; however, traders should consider a few key differences between crypto futures and traditional futures before dipping a toe into this rapidly growing market. Related: 3 things every crypto trader should know about derivatives exchanges Different instruments Traders entering cryptocurrency from the traditional markets will be accustomed to futures contracts with a fixed expiration date. Although fixed expiration contracts can be found in cryptocurrency markets, a significant proportion of crypto …
Technology / June 26, 2021
US crypto derivatives merchants need to leave customer funds alone, says CFTC
Per guidance released Wednesday evening, the Commodity Futures Trading Commission (CFTC) is advising businesses trading in crypto derivatives to hold customer funds very carefully. The new guidance continues the CFTC's interest in carving out rules for custodianship of virtual currencies — an area obviously distinct from any other asset class. Per the commission: "Custodians of virtual currencies are typically not subject to a system of comprehensive federal or state regulation and oversight, which includes safeguarding of these novel assets, and this raises potential risks to the protection of customer funds held at such custodians." The specific provisions of the guidance …
Regulation / Oct. 21, 2020
Former IBM and Cisco Executive Tom Noonan to Join Bakkt as Chairman of Board
Kelly Loeffler, the CEO of institutional trading platform Bakkt, announced that former cybersecurity expert at IBM, Cisco and Endgame Tom Noonan will become the chairman of its board of directors. The development was reported in a Medium post published on March 29. Per the announcement, the founder, chairman and CEO of the Intercontinental Exchange (ICE) and chairman of the New York Stock Exchange (NYSE) Jeff Sprecher is also joining the board of directors of the company. Alongside him, the post further welcomes Softbank managing partner Akshay Naheta and managing partner at Goldfinch Partners Sean Collins to the board. Loeffler notes …
Bitcoin / March 30, 2019
Bitcoin bears have plenty of reasons to hold BTC price below $32,000
Since May 10, the Bitcoin (BTC) chart shows a relatively tight range of price movement and the cryptocurrency has failed to break the $32,000 resistance on multiple occasions. The choppy trading partially reflects the uncertainty of the stock market as the S&P 500 Index ranged from 3,900 to 4,180 in the same period. On one side, there has been economic growth in the Eurozone where the gross domestic product grew 5.1% year over year. On the other, inflation continues to soar, reaching 9% in the United Kingdom. Further adding to Bitcoin's volatility was the digital assets regulatory framework proposal introduced …
Bitcoin / June 8, 2022