A class action lawsuit has been filed against Gemini Trust Company and its founders, Tyler and Cameron Winklevoss, on allegations that the cryptocurrency exchange provided interest-bearing accounts without properly registering them as securities.
Investors have accused the business and its founders of fraud and Exchange Act violations in the class-action lawsuit filed in the Southern District of New York on Tuesday. Cameron and Tyler Winklevoss created Gemini in 2015, offering a high-yield product called Gemini Earn that allowed users to deposit cryptocurrencies for interest, much like a bank account, and offered yields ranging from 0.45% to 8% on their holdings, depending on the asset.
Users of Gemini Earn are owed $900 million by Genesis and its parent business Digital Currency Group (DCG). In addition, Gemini “refused to honor any further investor redemptions, thereby wiping out any investors who still had assets in the scheme,” the investors claimed in their complaint.
The defendants also assert that if the Gemini Earn product had been registered, investors would have received information allowing them to assess the risks more accurately.
On Tuesday, Gemini provided an additional update and stated that the firm was still working through the Christmas break to find a solution. Gemini states that a more “fulsome update” is anticipated by this week’s end.