Crypto investors are suing the Winklevoss twins’ Bitcoin exchange over interest accounts. Around the same time, he is preparing for a class action lawsuit against the bankrupt FTX.
Winklevoss twins’ Bitcoin exchange faces lawsuit
Gemini, founded by the Tyler-Cameron twins, has suspended withdrawals from the Earn program for some time. According to Bloomberg’s report, crypto investors will now file lawsuits against Gemini’s founders, accusing them of violating the exchange’s fraud and securities laws. cryptocoin.comAs you follow, the timeline of the development that reached the court was as follows:
- Gemini announces it is pausing withdrawals on Earn (earn) program
- Large amounts of Bitcoin started to be released from Gemini wallets
- Gemini chases $900 million from Genesis
- Gemini CEO announces they are working on a new plan
- Now crypto investors accuse the exchange of violating securities laws…
Earn Update: Houlihan Lokey, the Financial Advisor of the Creditor Committee, has begun advocating for a plan to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of funds.https://t.co/PoRA7WsY4S
— Cameron Winklevoss (@cameron) December 17, 2022
The complaint, filed in Manhattan federal court on December 27, states that the Winklevoss brothers refused to “fulfill further investor redemptions” after stopping withdrawals due to their relationship with Genesis, which was on the verge of bankruptcy. The plaintiffs claimed that the products were not proprietary, which prevented them from obtaining disclosures to better assess the risks of using Gemini Earn. Launched last year, the Gemini Earn platform offered up to 8% interest on cryptocurrencies.
Gemini bankruptcy occurred shortly after the FTX crisis
Gemini started running into major problems at Gemini Earn in mid-November or soon after the first reports pointing to FTX’s liquidity problems. Since the withdrawals were stopped in November, Gemini Earn has been unavailable to users as the platform has millions of dollars stuck in Genesis. According to some reports, crypto lending platform Genesis and its parent company Digital Currency Group (DCG) allegedly owe Gemini customers up to $900 million.
On December 20, Cameron Winklevoss took to Twitter to announce that Gemini, on behalf of the creditors committee, has a plan to resolve liquidity issues and recover assets in Genesis and DCG.
On December 7, Genesis published a letter to its customers claiming that it will likely take several weeks to freeze withdrawals in order to find a solution to recovering users’ assets. The firm halted withdrawals on November 16, citing “unprecedented market turmoil” caused by the collapse of FTX.
