A US financial market regulator on Thursday (June 2) accused the Gemini platform, which specializes in cryptocurrency and founded by brothers Cameron and Tyler Winklevoss, of having lied to it during the authorization process for a financial product based on bitcoin. The CFTC, which regulates the futures markets in the United States on products such as oil, cereals but also bitcoin, has filed a complaint against Gemini “for having made false or misleading statements” and “for having failed to share material facts” with the CFTC during this certification in 2017.
This measure “is a clear signal that the agency will act to ensure the integrity of the market supervision process,” said one of its officials, Gretchen Lowe, in a press release. According to the complaint, representatives of Gemini failed to provide the CFTC with adequate information to assess whether the bitcoin futures contract the company was seeking to have approved, with a closing price based on the prevailing bitcoin price on its own platform, was susceptible to easy manipulation.
However, it was one of the first financial products on bitcoin of this nature evaluated by the CFTC, which was then trying to establish rules. This contract called XBT futures was finally launched in December 2017 on the venerable Chicago board options exchange (Cboe), becoming the first financial product linked to bitcoin with a storefront.
The CBOE legitimized bitcoin by recognizing that it was an asset like currencies or commodities.
Reduction of 10% of the workforce following the fall in prices
“Gemini has been a pioneering company and supporter of carefully thought-out regulations (on cryptocurrencies) since its inception,” the company responded in a message to AFP. Since its inception, Gemini has always asked for “permission” for its products and “always does the right thing,” and “we look forward to proving it in court,” the post added.
The complaint is the second blow of the day for the company of the Winklevoss brothers, who had announced earlier the reduction of 10% of its workforce due to the severe turbulence in the cryptocurrency markets currently.
Known for claiming fatherhood of Facebook before building a small fortune from their bitcoin investments, they launched Gemini in 2015.