On the same day it announced layoffs, Gemini was hit with a lawsuit by the U.S. Commodity Futures Trading Commission. The agency claims that the crypto exchange, run by brothers Cameron and Tyler Winklevoss, misled it during conversations in 2017 about a bitcoin futures contract product, according to a complaint filed in federal court in Manhattan Thursday.
Gemini, founded in 2014, has long proudly marketed itself an exchange that plays nice with regulators. But, according to the CFTC, Gemini's leadership made misleading statements on a product that "was significant because it was to be among the first digital asset futures contracts listed on a designated contract market." The complaint focuses on conversations between the crypto exchange and regulators in 2017.
The alleged false statements were about efforts by Gemini to prevent manipulation, according to the CFTC.
A Gemini spokesperson said the company "has 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.”
The company also published a letter to employees Thursday detailing plans to cut 10% of its staff of more than 1,000 in response to what its leadership deemed the start of "crypto winter."
The CFTC under Chairman Rostin Behnam has said it will push for a larger role in regulating crypto. The commission is generally the industry's preferred regulator over the SEC. A forthcoming bill backed by Sens. Cynthia Lummis and Kirsten Gillibrand would designate the CFTC as crypto’s lead regulator, according to a draft leaked to The Block last week. Lummis has called that version "outdated" and pledged to release the bill next week, but she has spoken publicly about advancing the CFTC's role in crypto regulation on other occasions.