Investors affected by the “wiped out” interest product by the Gemini Co. have sued the Winklevoss twins, Cameron and Tyler.
They filed a lawsuit against the brothers in the US District Court, Southern District of New York, on December 27, as reported by Bloomberg.
The Gemini brothers were accused of defrauding investors of their investment redemption. The plaintiffs stated that the company “effectively wiped out all investors who still had holdings in the program.”
Gemini Accused of Fraud
Gemini Trust Earn is a program that allows customers to lend the company crypto assets in their custody. The program attracted investors as they could generate up to 8% interest depending on the asset lent out.
The program, however, came to an unexpected halt after a key partner Genesis was exposed to the FTX saga. Since the suspension, investors have yet to recuperate their funds. Hence, they filed a class-act suit against the company for violating exchange acts.
Gemini Assures Investors Amidst Uncertainties
The crypto exchange, in a post on its website on December 23, has attempted to assure investors that it is working closely with Genesis to resolve the issue as urgently as possible. It also stated that all parties had cooperated well and will continue to work on investors’ sted “around the clock all through the holidays.”
Gemini, in a bid to facilitate fund recovery, has already reached out to financial services provider Houlihan Lokey, who serves as an adviser to Genesis.
According to reports, Genesis and its parent group Digital Currency Group (DCG), owe Gemini Earn users $900 million. The plaintiffs have also alleged that the program was not registered. They noted that if it was, it would have received disclosures allowing them to better assess the associated risks.
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