In a major advancement for the cryptocurrency sector, Gemini Trust, headed by the Winklevoss twins, Tyler and Cameron Winklevoss, has consented to pay $5 million to resolve allegations made by the Commodity Futures Trading Commission (CFTC).
Gemini Addresses CFTC Claims Of Deception In Bitcoin Futures Launch
According to a Bloomberg report, the agreement seeks to address allegations that the exchange allegedly deceived the regulator while trying to launch the inaugural US-regulated Bitcoin futures contract.
The suggested agreement was revealed in a combined court submission on Monday, preventing a trial that was scheduled to start on January 21, coinciding with Donald Trump’s second inauguration as US president.
The CFTC first initiated its lawsuit in 2022, claiming that Gemini issued “false and misleading statements” about its actions to avert market manipulation in Bitcoin prices. These prices were meant to act as a benchmark for derivative agreements related to the cryptocurrency.
The complaint states that from July to December 2017, Gemini, directly and via other means, supplied the CFTC with deceptive information while it assessed a possible self-certification for a Bitcoin futures contract.
The suggested futures contract would be settled according to the spot Bitcoin price established by an auction held on Gemini’s trading platform for digital assets, referred to as the Gemini Bitcoin Auction.
The CFTC asserted that several statements issued by Gemini were misleading or failed to include vital information necessary for grasping the vulnerability of the suggested contract to manipulation.
Regulatory Oversight In Cryptocurrency Sector
As stated in the complaint, Gemini staff allegedly knew or ought to have known that their remarks might deceive the CFTC, which depends on precise information from market participants to carry out its regulatory duties.
This suggested Bitcoin futures contract was especially important as it was slated to be among the initial digital asset futures contracts offered on a specified contract market.
The reliability of the information given was crucial for the CFTC to maintain the financial integrity of transactions and safeguard market participants from manipulation and other disturbances.
This civil enforcement action involving Gemini was part of a larger effort by the Biden administration to create regulatory control over the cryptocurrency industry.
The upcoming inauguration of Trump, seen by numerous crypto supporters as a possible ally for the sector, brings up queries regarding the future of cryptocurrency regulation in the US.
In a similar vein, Gemini had earlier complied with subpoenas requesting laptops from two ex-executives during a criminal investigation that eventually ended without any charges being brought.
At the time of writing, the market’s leading cryptocurrency, Bitcoin, is trading at $102,130 for the first time in over two weeks, up more than 10% on a weekly basis.
Featured image from DALL-E, chart from TradingView.com
