The United States Commodity Futures Trading Commission (CFTC) filed suit against Gemini Trust Co. in the U.S. Southern District Court of New York on Thursday. The CFTC claimed in the civil suit that Gemini made false or misleading statements to the CFTC in 2017 during in-person meetings and in documents, violating the Commodity Exchange Act and other regulations.
The agency was making an evaluation of the potential self-certification of a Bitcoin (BTC) futures contract to be based on the spot Bitcoin price determined by an auction held on Gemini’s digital asset trading platform.
The CFTC was considering whether the proposed Bitcoin futures contract would be susceptible to manipulation. The proposed Bitcoin futures contract would have been among the first digital asset futures contracts listed.
Gemini is the cryptocurrency trading platform founded by brothers Cameron and Tyler Winklevoss. It announced staff cuts Thursday and is preparing to lay off 10% of its workers due to the crypto market downturn.
The CFTC said in a statement that it is seeking disgorgement of ill-gotten gains, monetary penalties and injunctions relating to registration and trading and against further violations of the Commodity Exchange Act.
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“This enforcement action sends a strong message that the Commission will act to safeguard the integrity of the market oversight process,” CFTC acting director of enforcement Gretchen Lowe said in the statement.
Gemini told Cointelegraph in a statement:
“Gemini has been a pioneer and proponent of thoughtful regulation since day one. We have an eight year track-record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court.”
Bitcoin futures began trading on the CBOE on December 10, 2017, based on the price of the cryptocurrency on the Gemini exchange.