The cryptocurrency exchange Gemini has filed a complaint with the U.S. Commodity Futures Trading Commission (CFTC), accusing the regulator of baseless legal action and creating a “toxic culture” within the agency.
This is reported by Бізнес • Медіа
Background of the Legal Conflict Between Gemini and CFTC
In June 2022, the CFTC filed a lawsuit against Gemini, claiming that the exchange misled investors regarding potential manipulation of the Gemini Auction product during Bitcoin futures trading back in 2017. The main evidence in the case was the testimony of former employee Benjamin Small, who was terminated for negligence. According to Gemini representatives, after his dismissal, Small launched a targeted campaign aimed at “destroying Gemini.”
In the complaint addressed to Inspector Christopher Skinner, Gemini emphasizes that the CFTC’s Division of Enforcement (DOE) initiated an investigation based on Small’s testimony and found no evidence of illegal activities by the exchange from 2018 to 2022. However, despite the lack of evidence of wrongdoing, the CFTC chose not to withdraw the charges and brought the case to court.
Details of Gemini’s Complaint and the Company’s Position
Gemini claims that DOE employees acted out of self-serving motives to advance their careers and abused their positions. The company believes that the case was built on false statements from the informant. As a result of the legal proceedings between Gemini and the CFTC, a settlement was reached without any admission of guilt from the exchange, in which Gemini paid $5 million.
“The economic damages caused by the DOE, the innovations that were destroyed, and the taxpayer money wasted during this case are significant. The fact that the CFTC was aware of this for many years but did nothing to stop, rein in, or reform this rogue division is deeply disappointing,” said Jack Boman, managing partner of the law firm Baughman Kroup Bosse.
The filing of the complaint comes amid Gemini’s preparations for an initial public offering (IPO) in the U.S. The exchange’s management emphasizes that the legal battles and the regulator’s actions negatively impact the company’s innovation and reputation.