- Crypto exchange Gemini is facing a class action lawsuit over its interest-bearing accounts.
- Investors are accusing Gemini — along with founders Cameron and Tyler Winklevoss — of fraud, according to a complaint filed Tuesday.
- Gemini’s earn program attracted customers because it offered up to 7.4% interest.
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Cryptocurrency exchange Gemini, along with founders Tyler and Cameron Winklevoss, is being sued by investors for selling their interest-bearing products.
The company and the Winklevoss twins face charges of fraud and violation of securities laws, according to a complaint filed Tuesday in the Southern District of New York.
The Gemini Earn Program, which offered customers up to 7.4% interest, abruptly halted its offering last month, “wiping out” customers who still had interests in the program. This was the result of the FTX contagion affecting Genesis Global, an institutional crypto lender and key partner of Gemini.
Investors Brendan Picha and Max J. Hastings, who are named as two of the plaintiffs in the filing, say Gemini failed those assets as securities under US securities laws.
Gemini “refused to honor further investor redemptions, effectively wiping out any investors who still had interests in the program,” the complaint reads. “As Genesis, due to a series of collapses in the crypto market in 2022, including FTX Trading Ltd. (“FTX”), encountered financial difficulties, Genesis was unable to return crypto assets borrowed from Gemini Earn investors.”
Gemini didn’t immediately respond to Insider’s request for comment.