{"id":34230,"date":"2022-06-02T22:46:31","date_gmt":"2022-06-02T22:46:31","guid":{"rendered":"https:\/\/harchi90.com\/cftc-sues-gemini-trust-over-statements-ahead-of-bitcoin-futures-launch\/"},"modified":"2022-06-02T22:46:31","modified_gmt":"2022-06-02T22:46:31","slug":"cftc-sues-gemini-trust-over-statements-ahead-of-bitcoin-futures-launch","status":"publish","type":"post","link":"https:\/\/harchi90.com\/cftc-sues-gemini-trust-over-statements-ahead-of-bitcoin-futures-launch\/","title":{"rendered":"CFTC sues Gemini Trust over statements ahead of bitcoin futures launch"},"content":{"rendered":"
A US markets regulator has sued Gemini Trust, the digital asset exchange owned by the billionaire Winklevoss twins, alleging false statements in relation to a proposed bitcoin futures contract in the early days of cryptocurrency derivatives. <\/p>\n
Between July and December 2017 Gemini allegedly omitted \u201cmaterial facts\u201d and provided untrue information to the Commodity Futures Trading Commission, which was in the process of assessing the new product, according to a civil complaint filed on Thursday by the regulator. <\/p>\n
The case harks back to months when major US financial exchanges were in a race to list bitcoin futures to capitalize on intense investor interest. One such futures contract was to be settled against the spot price of bitcoin in auctions run by Gemini, the CFTC said. <\/p>\n
The CFTC did not identify the contract, but Gemini’s bitcoin price data were referenced for futures launched by Chicago-based Cboe Global Markets in 2017. Cboe, which was not named in the complaint, subsequently terminated its contract. <\/p>\n
The business involving Gemini “was particularly significant because it was to be among the first digital asset futures contracts listed on” a CFTC-regulated exchange, “at a time of fervent interest by market participants in obtaining exposure to bitcoin through the derivatives markets”, according to the complaint. <\/p>\n
The CFTC is seeking civil monetary penalties and other relief including trading and registration bans. <\/p>\n
In a statement, Gemini said it \u201chas been a pioneer and proponent of thoughtful regulation since day one. We have an eight year track-record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court. ” <\/p>\n
Cboe declined to comment.<\/p>\n
The legal action came hours after Gemini, an early entrant into digital asset markets, announced it plans to lay off about a tenth of its staff in another sign of how the powerful drop in cryptocurrency trading has disrupted the industry’s rapid growth. <\/p>\n
The digital asset market has tumbled by about $ 2tn from the peak in November 2021 to $ 1.3tn, according to data collated by the Financial Times. <\/p>\n
“This is where we are now, in the contraction phase that is settling into a period of stasis – what our industry refers to as ‘crypto winter’,” said Cameron and Tyler Winklevoss in a note to employees, which was first reported by Bloomberg .<\/p>\n
Bitcoin has fallen by more than 50 per cent from its November high, while other smaller coins have faced much more severe losses. At the same time, the crash last month of the once-popular luna and terra tokens has shaken traders’ faith in crypto lending programs such as \u201cstaking\u201d, which had provided lucrative returns. <\/p>\n
Crypto traders tend to more actively bet on the market when it is rising, analysts and exchange executives have said. Given the breadth and severity of the bear market, crypto trading volumes have pulled back sharply. <\/p>\n
Spot trading volumes across leading exchanges have averaged about $ 750bn a month this year, compared with $ 1.2tn in 2021, according to data from The Block Crypto. Lower volumes cut down on the fees exchanges earn from facilitating transactions. <\/p>\n