Tyler and Cameron Winklevoss, the founders of cryptocurrency exchange Gemini, are facing a lawsuit from investors over the platform’s interest-earning program, known as Gemini Earn. The investors, who filed the lawsuit in Manhattan federal court on December 27, have accused the Winklevoss brothers and their firm of fraud and violations of securities laws.
Gemini Earn
According to the complaint, the products offered through Gemini Earn have not been registered, which prevented investors from receiving necessary disclosures to assess the risks of using the platform. This lack of registration is a violation of securities laws, which require companies to register their products and provide necessary disclosures to investors in order to protect them from potential fraud or other risks.
Gemini Earn was launched in 2020 with the promise of generating up to 8% in interest on crypto holdings. However, the platform has faced major issues since November, when it halted withdrawals due to exposure to troubled trading firm Genesis Global Capital. The platform has been unavailable to users since then, with millions of dollars of assets reportedly stuck on Genesis. Some reports estimate that crypto lender Genesis and its parent company, Digital Currency Group (DCG), owe as much as $900 million to Gemini clients.
Overall, the lawsuit against the Winklevoss brothers and Gemini highlights the risks that investors face when using cryptocurrency platforms and the importance of proper registration and disclosure in order to protect investors.
Gemini is working on resolving the issue
Gemini Earn, the interest-earning program offered by cryptocurrency exchange Gemini, has faced major issues since November, when it halted withdrawals due to exposure to troubled trading firm Genesis Global Capital. As a result, the platform has been unavailable to users and millions of dollars in assets have reportedly become stuck on Genesis. Some reports estimate that crypto lender Genesis and its parent company, Digital Currency Group (DCG), owe as much as $900 million to Gemini clients.
In response to the issues faced by Gemini Earn, on December 20, Cameron Winklevoss, one of the founders of Gemini, announced on Twitter that the company had developed a plan on behalf of the creditor committee to resolve the liquidity issues at Genesis and DCG and recover the assets. It is unclear what specific steps this plan involves or when it will be implemented.
Final Thoughts
The ongoing issues with Gemini Earn and the potential financial losses faced by clients highlight the risks that investors face when using cryptocurrency platforms. It is important for investors to carefully assess the risks and potential rewards of any investment and to be aware of the potential for financial losses.
