Gemini Exchange Being Sued by Investors
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An editor at Coincrop
30 Dec 2022 | 4 min read
nvestors are taking legal action against Crypto Exchange Gemini over their Interest-Earning Program, alleging they have been denied access to the earning opportunities promised by this program.
In November, the platform suddenly terminated its Gemini Earn program - an action that was described in a court filing as having “effectively wiped out” any remaining investors who had positions.
On Tuesday, an official court filing revealed that investors have taken legal action against crypto exchange Gemini for the sale of its interest-earning crypto products.
Brendan Picha and Max J. Hastings, two investors, are taking things to court by filing a class-action lawsuit with the U.S Southern District Court of New York on behalf of themselves and any other persons who had similar experiences. This suit is seeking a trial by jury in accordance with the complaint they submitted.
Picha and Hastings contend that Gemini's Earn program, which provided users with interest of up to 7.4% for loaning out their digital assets, was not documented as a security in comportment with U.S. securities law regulations. The filing also states that the program came to an abrupt end near Nov 16 after crypto exchange FTX filed for bankruptcy resulting in liquidity problems at Genesis Trading – Gemini's loanee owned by Digital Currency Group (also parent company of CoinDesk).
"When Genesis encountered financial distress as a result of a series of collapses in the crypto market in 2022, including FTX Trading Ltd. (“FTX”), Genesis was unable to return the crypto assets it borrowed from Gemini Earn investors," the filing said, adding that after the Gemini Earn program was halted, the company "refused to honour any further investor redemptions, effectively wiping out all investors who still had holdings in the program, including plaintiffs."
Following the market crash and bankruptcy of FTX and Terraform Labs, crypto companies that have experienced financial hardship are being hit with a wave of investor lawsuits attempting to recoup their losses. Gemini has yet to comment on the matter when asked for further information.
JonathanAn editor at Coincrop
Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.
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