The U.S. Commodity Futures Trading Commission (CFTC) is suing New York-based crypto exchange Gemini for “making false or misleading statements” or omitting facts in conversations with the commission. The case for violation of the Commodity Exchange Act (CEA) was filed in the federal court in New York.
The CFTC’s allegations point to discussions that took place with Gemini for self-certification of a Bitcoin futures contract between July and December 2017 — around five years ago. If it had gained approval it would have been the first digital asset futures contract in the U.S. to be listed.
CFTC Acting Director of Enforcement Gretchen Lowe said in a statement:
“Making false or misleading statements to the CFTC in connection with a futures product certification undermines the CFTC’s work to ensure the financial integrity of all transactions subject to the CEA, protect market participants, deter and prevent price manipulation, and promote responsible innovation and fair competition. This enforcement action sends a strong message that the Commission will act to safeguard the integrity of the market oversight process.”
The complaint alleges that Gemini provided false information pertaining to facts relevant for the CFTC to understand the Bitcoin futures contract’s susceptibility to manipulation. In other words, the CFTC claims that Gemini lied or omitted facts about how easily the Bitcoin futures contract could fall prey to price manipulation.
The CFTC statement further said that Gemini employees knew or should have known that their statements were misleading or false.
The CFTC is asking for Gemini, which is owned by Cameron and Tyler Winklevoss, to yield illegal proceeds, as well as a ban on its registration and trading, and fines.
According to a Bloomberg report, Gemini has decided to fight the lawsuit. In a statement to the publication, it said:
“Gemini has been a pioneer and proponent of thoughtful regulation since day one. We have an eight-year track record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court.”