Crypto exchange Gemini Trust has publicly accused the U.S. Commodity Futures Trading Commission’s (CFTC) Division of Enforcement of pursuing a “self-serving” lawsuit in 2022 based on a false whistleblower report allegedly filed by a disgruntled ex-employee.
Whistleblower Report at Center of Controversy
In a letter sent to CFTC Inspector General Christopher Skinner, Gemini alleged that the lawsuit—brought by the CFTC in June 2022—was driven by a “career-advancing agenda” among CFTC litigators. The complaint centered around alleged false or misleading statements Gemini made during the CFTC’s evaluation of its proposed Bitcoin futures contract back in 2017.
Gemini claimed that the case relied heavily on a “lie-riddled” submission by former COO Benjamin Small, who was fired in 2017 for allegedly hiding losses tied to a multi-million dollar rebate fraud scheme involving third parties including Hashtech LLC and Cardano Singapore PTE Ltd.
Settlement and Fallout
In January, Gemini settled with the CFTC for $5 million without admitting or denying wrongdoing. However, the exchange now states that it was coerced into settling, describing the legal pressure as giving it “no other choice” at the time.
CFTC Bitcoin Futures Manipulation Allegation Disputed
Gemini denied any wrongdoing in its 2017 Bitcoin futures filing, stating that the product ran smoothly for 19 months without any instances of manipulation or complaints. The exchange claims the whistleblower allegations were not properly scrutinized and that CFTC staffers “immediately and unquestioningly” embraced the narrative to build a case.
Call for Internal Reform at CFTC
Gemini voiced support for ongoing reforms, applauding CFTC Commissioner Caroline Pham for acknowledging “dubious enforcement actions” in a May 2024 statement. The company urged the CFTC to engage in serious introspection and promised to assist the agency in restoring trust and fairness within its enforcement division.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.