Gemini sued for “violation of US Securities Exchange Act”
Amid a backdrop of uncertainty, Gemini was sued with a complaint relating to paid accounts that weren’t registered as securities.
The cryptocurrency exchange is facing a lawsuit due to an uncertain scenario among investors. Gemini was sued for “violating securities laws” in the United States.
Its founders, the Winklevoss twins, had to negotiate with the US District Court in Manhattan. This is after the complaint was made official on December 27th. It was alleged that the company had “hidden information about the risks” associated with Gemini Earn.
GEMINI Investor dissatisfaction
The lawsuit against the agency is based on a problem related to the lack of legal visibility with which the company is managed. At some point, clients would realize that Gemini’s interest-bearing accounts were not properly registered as securities in the legal framework.
This situation would prevent users from obtaining “important” information used in risk assessment to trade on the platform. Essentially, Gemini was sued due to the uncertainty of the Gemini Earn environment. This product aims to gain benefits by generating interest.
It was designed to earn up to 8% interest on cryptocurrency holdings.
GEMINI current location
Since November, withdrawals from the platform have been disabled as user capital was frozen with the collapse of FTX. Some estimates suggest that about $900 million is left unsolved by Gemini.
With liquidity problems from strategic partners like Genesis Global, Gemini was forced to keep business flowing. Investor discontent has since emerged.
From a general perspective, this exchange is not the only one that has been the subject of controversy recently. Binance, for its part, has also received questions directed at the company’s desire to maintain a sphere of “stability”. This is at the same time that markets are facing significant investor exits.
However, unlike Gemini, Binance has shown a history of apparent “calmness”. It issues notices specifying its “disposition” to preserve capital reserves in financial emergency situations.
In response, and in response to the allegations Gemini has been sued, her words to Forbes would make it clear that she is “committed to providing a secure and compliant platform” to its customers. He stressed that he will defend himself vigorously.
