In its 2017 effort to be among the first to sell Bitcoin futures contracts, the exchange allegedly provided incorrect information verbally and in writing
The United States Commodity Futures Trading Commission (CFTC) filed suit against Gemini Trust Co. in the U.S. Southern District Court of New York on Thursday. The government was evaluating the prospective self-certification of a Bitcoin (BTC) futures contract whose price would be decided by an auction performed on Gemini's digital asset trading platform. On December 10, 2017, Bitcoin futures started trading on the CBOE based on the price of the cryptocurrency on the Gemini exchange.
Gemini is a cryptocurrency trading company created by the Winklevoss brothers, Cameron and Tyler. It announced workforce reductions on Thursday and is going to lay off 10 percent of its employees in response to the bear market in cryptocurrencies.
The CFTC examined whether the proposed Bitcoin futures contract was subject to manipulation. The planned Bitcoin futures contract would have been one of the first futures contracts for digital assets. The CFTC said in a statement that it is seeking disgorgement of ill-gotten earnings, monetary fines, and injunctions against future breaches of the Commodity Exchange Act pertaining to registration and trading. In a statement issued by Gretchen Lowe, acting director of CTFC:
This enforcement action sends a strong message that the Commission will act to safeguard the integrity of the market oversight process,
Reported by several sources, Gemini stated:
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.