Gemini, Winklevoss Twins Face Class-Motion Lawsuit over Lending Merchandise

Class-Action Suit Filed Regarding Interest-Bearing Crypto Products on Gemini Exchange
In the US Southern District Court of New York, Brendan Picha and Max J. Hastings have launched a class-action lawsuit against Gemini, a cryptocurrency exchange, and its owners, Tyler and Cameron Winklevoss. In the case, Gemini and its owners were charged with fraud and Exchange Act violations on behalf of themselves and “others similarly situated.”
The action is a result of Gemini Trust Earn’s sudden termination of its interest-bearing cryptocurrency products in mid-November, which provided investors with a yield of up to 7.4 percent. This choice was made following Sam Bankman-Fried’s bankruptcy filing for FTX, which resulted in a liquidity crisis at Genesis Trading, a significant borrower of Gemini’s loan products.
“Genesis was unable to return the crypto assets it borrowed from Gemini Earn investors when it encountered financial distress due to a series of collapses in the crypto market in 2022, including FTX Trading Ltd. (“FTX”),” according to the court complaint. It went on, saying that “[Gemini] refused to honour any further investor redemptions, essentially wiping out all investors, including plaintiffs, who had holdings in the programme.”
The plaintiffs contend that investors would have received disclosures to help them better comprehend the risks if the interest-bearing cryptocurrency products had been registered as securities under US securities law.
Authorities Opposing Crypto-Lending Products
Regulators in the US are apparently looking into products like interest-bearing accounts that involve crypto-lending. Despite the fact that no one has been charged as of yet, the business reached a $100 million settlement with the now-bankrupt BlockFi on the condition that they stop accepting new US clients. Furthermore, it has been claimed that federal and state regulators are looking into the offerings of another cryptocurrency-lending service provider called Celsius.
The crypto mammoths that crashed this year exposed several crypto-lending companies to significant risk. Because of its close ties to FTX, BlockFi filed for chapter 11 bankruptcy protection in the US and is currently fighting for the rights to the Robinhood shares owned by Bankman Fried. Furthermore, Vauld, a Singaporean company, has stopped operations and is currently restructuring.