Tyler and Cameron Winklevoss, founders of Gemini cryptocurrency exchange, are facing new investor demand over the Gemini Earn interest-earning program.
Disgruntled investors have filed a lawsuit against the Gemini founders, accusing the company of fraud and violation of securities laws.according to a Bloomberg report.
Filed December 27 in Manhattan federal court, the lawsuit claims the Winklevoss brothers refused to “accept any further refunds from investors” after detaining them due to their exposure to troublesome trading firm Genesis Global Capital.
The plaintiffs claimed that the products had not been registered, which prevented them from receiving information to better assess the risks of using Gemini Earn. Launched last year, lThe Gemini Earn platform was designed to earn up to 8% interest on your cryptocurrency holdings.
Gemini began facing major issues at Gemini Earn in mid-November, or shortly after early reports indicated FTX liquidity problems.
Since stopping withdrawals in November, Gemini Earn remains unavailable to users as the platform has millions of dollars stuck in Genesis. According to some reports, cryptocurrency lender Genesis and its parent company Digital Currency Group (DCG) allegedly owe up to $900 million to Gemini clients.
On December 20, Cameron Winklevoss took to Twitter to announce that Gemini has submitted a plan on behalf of the creditors’ committee to resolve Genesis and DCG’s liquidity problems and recover assets.
Earn Update: Today, Houlihan Lokey presented a plan on behalf of the Creditor Committee to resolve the liquidity issues at Genesis and DCG and provide a path for the recovery of assets.
— Cameron Winklevoss (@cameron) December 20, 2022
Earnings Update: Today, Houlihan Lokey submitted a plan on behalf of the Creditors’ Committee to resolve liquidity issues at Genesis and DCG and provide a path for asset recovery.
On December 7, Genesis sent a letter to its clients stating that the withdrawal freeze would likely last a few weeks to find a solution that would allow users’ assets to be recovered.. The firm suspended withdrawals on November 16, citing “unprecedented market turmoil” caused by the FTX collapse.
Gemini did not immediately respond to Cointelegraph’s request for comment.
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