Crypto exchanges Gemini and Winklevoss twins sued by investors

Cryptocurrency exchange Gemini Founders Cameron and Tyler Winklevoss are reportedly being sued by investors who accuse the company and Mark Zuckerberg’s nemesis of selling interest-bearing accounts and not registering them as securities. According to Bloomberg.

The lawsuit — Picha et al v. Gemini Trust Company, LLC et al — was filed Tuesday in the Southern New York District Court in Manhattan.. suit Claiming Gemini sold high-An interest account was opened through a program called Gemini Earn, where investors loaned out their Gemini crypto assets in exchange for interest payments. Picha et al allege that Gemini did not register these accounts as securities before selling them to investors, but plaintiffs also allege that these accounts were The account was put up for sale with a misleading statement. The complaint reads:

Gemini marketed GIA with repeated false and misleading statements, including that GIA is a safe way to attract attention. Gemini has also omitted or concealed material information regarding risks associated with Gemini Earn. This includes information about so-called partners and borrowers associated with Genesis Global Capital, LLC (“Genesis”), a program offered to all Gemini Earn investors. ‘Crypto Assets.’ When Genesis ran into financial difficulties in 2022 as a result of a series of collapses in the crypto markets, including FTX Trading Ltd. (“FTX”), Genesis decided to sell Gemini from his Earn investors. I was unable to return the borrowed crypto assets.

According to Bloomberg, Gemini Earn advertised that these accounts could earn a whopping 8% interest. This was a lucrative promise for potential investors. In November of this year, The company suspended withdrawals rear The aftermath of the FTX collapse has shaken investors in Gemini’s primary partner, Genesis Global, who liquidated their assets.

At this time, the complaint states, “Gemini has suspended the Gemini Earn Program and refused to redeem any further investors, effectively wiping out all investors still holding in the program.” Decrypt report says Genesis may owe Gemini Earn investors over $900 million.

“We continue to work with Genesis and DCG and are acting with the utmost urgency. All parties will remain engaged and collaborating,” Gemini wrote. . Gemini Acquisition Webpage in a statement released last week.Meafter that In a statement issued on December 27, the company wrote: “We continued to work on a solution over the Christmas holidays and will have a more comprehensive update by the end of the week.”