Gemini Trust Co. Settles CFTC Lawsuit for $5 Million
Gemini Trust Co. has agreed to pay $5 million to settle a lawsuit filed by the Commodity Futures Trading Commission (CFTC) in 2022. The lawsuit alleged that the firm provided misleading information to authorities during its attempt to launch the first U.S.-regulated Bitcoin futures contract.
Details of the Settlement
According to a proposed consent order filed in the U.S. District Court for the Southern District of New York, Gemini will close the case without admitting or denying liability. This resolution avoids a trial that was originally scheduled to begin on January 21, with a pre-trial conference set for January 13. The CFTC had alleged that Gemini provided inaccurate and misleading information about its strategies to prevent Bitcoin price manipulation between July and December 2017.
Background of the Case
The CFTC filed the lawsuit against Gemini in Manhattan’s federal court, alleging that the firm’s safeguards to prevent price manipulation were inadequate and not accurately described to the commission. Gemini consistently denied any wrongdoing, maintaining that the proposed futures contract performed as intended without causing investor harm. In an August 2022 statement, the company asserted that the reference price was reliable, no investors were harmed, and no price manipulation occurred.
Investigation and Compliance
During the investigation, Gemini complied with a subpoena by providing laptops belonging to two former executives as part of a related criminal inquiry. The criminal probe concluded without charges, but the civil enforcement case remained active, ultimately leading to the $5 million settlement.
Regulatory Environment and Market Impact
The action against Gemini is among many cases brought during the Biden administration, which has emphasized stricter regulatory oversight of the crypto industry. However, with President Donald Trump set to assume office for a second term, crypto advocates anticipate a more lenient regulatory environment. Ripple CEO Brad Garlinghouse recently pointed to a “Trump effect” on the company’s strategy, noting that 75% of Ripple’s job openings are now U.S.-based. The upcoming inauguration has also fueled a rally in Trump-themed meme coins, with some seeing double- and triple-digit gains as market optimism grows in anticipation of friendlier crypto policies.
Conclusion
In conclusion, Gemini Trust Co. has agreed to pay $5 million to settle a CFTC lawsuit alleging that the firm provided misleading information during its attempt to launch a Bitcoin futures contract. The settlement avoids a trial and marks a significant development in the regulatory environment for the crypto industry. As the Biden administration’s stricter oversight gives way to a potentially more lenient Trump administration, crypto advocates and companies are adapting their strategies and anticipating a more favorable regulatory landscape.
Source: Cryptopotato.com
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