New York – The Commodity Futures Trading Commission (CFTC) secured a consent order against Gemini Trust Company LLC in the U.S. District Court for the Southern District of New York on January 13, 2025. The order permanently enjoins Gemini and finds the company violated the Commodity Exchange Act (CEA) by making false or misleading statements to the Commission.
Gemini Trust will pay a $5 million civil monetary penalty as a result of the settlement. The case originated from a CFTC complaint filed on July 2, 2022, alleging deceptive practices during the self-certification process for a bitcoin futures contract.
According to the CFTC, between July and December 2017, Gemini Trust misrepresented key details concerning its operations to the Commission. These statements were made as part of the evaluation of a proposed bitcoin futures contract intended for trading on CFTC-regulated markets. Specifically, Gemini representatives allegedly made false or omitted material facts regarding a purported “prefunding requirement” and the costs associated with trading on the Gemini Auction, where the spot price of bitcoin was determined.
The CFTC found that Gemini falsely claimed to be a “full reserve” exchange requiring complete prefunding of all transactions. The company also made misleading statements about its self-trading prevention measures, fee rebates, and reported trade volume and liquidity. These inaccuracies were considered material to the Commission’s assessment of the bitcoin futures contract’s susceptibility to market manipulation.
“Making false or misleading statements to the CFTC… undermines the CFTC’s efforts to ensure all futures products… comply with the CEA and CFTC regulations,” stated Ian McGinley, Director of Enforcement. “This result sends a strong message that the Commission will act to safeguard the integrity of the market oversight process.”
The CFTC’s investigation was led by Christopher Giglio, Shantel Ogbuagu, Peter Janowski, David W. Oakland, Katherine Rasor, Andrew Rodgers, Diana Wang, K. Brent Tomer, Alejandra de Urioste, Lenel Hickson Jr., and Manal M. Sultan, with additional assistance from Alyson Cohen and Jack Murphy.
Source: CFTC.gov
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