The Winklevoss twins’ Gemini Trust Co. cryptocurrency exchange agreed to pay $5 million to end a Commodity Futures Trading Commission lawsuit claiming it misled the derivatives regulator in a bid to launch the first US-regulated Bitcoin futures contract.
The deal was disclosed Monday in a filing signed by both parties, avoiding a trial set to begin Jan. 21, the day after Donald Trump will be inaugurated for his second term as US president. Gemini, which was founded by Cameron and Tyler Winklevoss, settled without admitting or denying liability in the case.
In 2022, the CFTC sued Gemini in Manhattan federal court claiming the exchange “made false and misleading statements” about how it would prevent manipulation in Bitcoin prices that were to serve as a reference for derivatives based on the cryptocurrency.
The settlement was approved Monday by US District Judge Alvin Hellerstein, who in November rejected Gemini’s request and ruled that a jury would have to determine whether 32 statements by Gemini executives to regulators were misleading.
Gemini and the CFTC didn’t respond to emails seeking comment on the agreement.
The Gemini Trust civil enforcement case is one of many court efforts made by President Joe Biden’s administration to assert regulatory authority over cryptocurrencies. Trump’s election was hailed by many crypto advocates who expect his administration will back more industry-friendly regulation. The billionaire Winklevoss brothers each donated the maximum $844,600 to Trump’s 2024 campaign.
In late 2017 or early 2018, Gemini turned over subpoenaed laptops from two former executives in a related criminal probe that was closed without any charges filed.
Gemini continues to face a suit by the US Securities and Exchange Commission alleging the exchange and the crypto lending firm Genesis Global Capital illegally raised billions of dollars in cryptoassets from investors through the so-called Gemini Earn program. Gemini agreed in February to return at least $1.1 billion to customers as part of a separate settlement with New York regulators.
The case is Commodity Futures Trading Commission v. Gemini Trust Co., 22-cv-04563, US District Court, Southern District of New York (Manhattan).
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