The Winklevoss twins and their crypto firm sued by clients for fraud

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Tyler and Cameron Winklevoss and their crypto exchange have been sued by investors in New York for alleged fraud.

Brendan Picha and Max J Hastings claim in a class action lawsuit in Manhattan federal court that Gemini Trust Co. offered up to 7.4% interest to clients for lending them crypto assets.

But the lawsuit says the company failed to register those assets as securities under U.S. securities laws.

The company halted the Gemini Earn program on November 16 after crypto platform FTX filed for bankruptcy. And the collapse of FTX created liquidity issues for Genesis Trading, which acted as a Geminis borrower for the $900 million program.

Gemini marketed GIAs with repeated false and misleading statements, including that GIAs were a safe method of collecting interest, the lawsuit says.

He said the company terminated the program and refused to honor any further investor buyouts, eliminating all investors who still held stakes in the program, including the plaintiffs.

The lawsuit claims that had the Gemini product been registered as securities, investors would have been more aware of the risks involved.

Geminis’ actions resulted in significant financial losses for its investors, the lawsuit says.

FTX founder Sam Bankman-Fried is currently under house arrest in California after being extradited to the United States from the Bahamas.

Prosecutors say he committed a years-long fraud by using billions of dollars in customer deposits at his crypto firm to cover losses at his hedge fund Alameda Research, buy real estate and make political donations.

He is expected to return to court in January and is charged with two counts of wire fraud and six counts of conspiracy, including money laundering and campaign finance offences. If convicted, he faces decades in prison.

The Independent has contacted Gemini for comment.

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