The lawsuit, filed in the U.S. District Court for the Southern District of New York, claims that the Winklevoss brothers and their company committed fraud and breaches of the Exchange Act.
Gemini Earn Suspends Withdrawals After Genesis Global Liquidity Difficulties
Gemini Earn, a high-yield product offered by Gemini Trust Company, allows consumers to deposit their cryptocurrencies for interest, similar to a bank account. The product offers yields of up to 8% on holdings, depending on the asset. However, the exchange unexpectedly suspended withdrawals for Earn last month when its primary partner, Genesis Global, faced liquidity problems due to the bankruptcy of several other crypto businesses, including FTX and Alameda Research.
Investors Claim Lack of Information to Make Informed Decisions on Risks of Using Gemini Earn
The plaintiffs in the lawsuit against Gemini Trust Co. and the Winklevoss brothers allege that they needed to be provided with the necessary information to make an informed decision about the risks of using Gemini Earn because the products needed to be registered. They also claim that the Winklevoss brothers refused to honor any further investor redemptions after suspending them due to their exposure to Genesis Global Capital.
Gemini Earn Experiences Difficulties, and Millions of Dollars Remain Stuck on Genesis
Since suspending withdrawals in November, Gemini Earn has had millions of dollars stuck on Genesis. There have been allegations that Genesis and its parent company, Digital Currency Group (DCG), owe Gemini customers as much as $900 million. To resolve the liquidity concerns at Genesis and DCG and recover assets, Gemini has turned to financial services firm Houlihan Lokey, which serves as the financial advisor of the creditor committee.
