In brief
- Gemini has accused the CFTC of waging a seven-year “lawfare” campaign driven by career ambitions, not consumer protection.
- The complaint claims CFTC lawyers relied on false whistleblower claims from a former employee later found to have committed fraud.
- Gemini argues no market harm occurred and criticizes the agency’s continued pursuit despite evidence discrediting its key witness.
Crypto exchange Gemini has filed a complaint against the Commodity Futures Trading Commission, accusing the agency’s enforcement division of waging a vindictive seven-year “lawfare” campaign that prioritized career advancement over consumer protection and wasted millions in taxpayer dollars.
Gemini alleged that enforcement lawyers “selectively and unfairly weaponized” federal law to bring “dubious false statements charges” against the exchange founded by Cameron and Tyler Winklevoss, in a 13-page letter filed June 13 to CFTC Inspector General Christopher Skinner.
“The DOE Staff was not motivated by a principled application of the law or desire to protect the commodities markets,” Gemini’s lawyers wrote. “Rather, these lawyers were driven by a selfish desire to advance their careers by misusing their offices to obtain a high-profile ‘win’ against Gemini Trust.”
The company alleges the entire investigation stemmed from a “lie-riddled whistleblower submission by a discredited former employee” seeking revenge after being fired.
Gemini’s grievance stems from a 2022 CFTC lawsuit that accused Gemini of making “material false or misleading statements” to regulators in 2017 about whether its Bitcoin auction pricing mechanism was susceptible to manipulation.
Those statements were critical because they helped support Cboe’s launch of the first-ever Bitcoin futures contract, which used Gemini’s auction prices to determine settlement values.
Gemini ultimately paid a $5 million fine in January to settle the case without admitting wrongdoing.
Where it began
The origins date back to 2017, when former Gemini Chief Operating Officer Benjamin Small filed a whistleblower report, claiming the exchange had made false statements about Bitcoin futures contracts.
However, Gemini says Small was actually fired for helping facilitate a $7.45 million rebate fraud scheme and then embarked on what he called a campaign to “destroy” the company.
The exchange points to a 2022 arbitrator ruling that found Small “fraudulently procured his employment,” “lied repeatedly,” and made false statements in his whistleblower submission.
Despite this, CFTC enforcement continued pursuing Gemini while taking no action against Small, who may now receive a $1.5 million whistleblower award.
The complaint notes that lead prosecutor Andrew Rodgers left the CFTC shortly after the settlement to join a private law firm, where his biography now touts the Gemini case as one of “the agency’s most high-profile matters.”
As Acting CFTC Chair Caroline Pham has publicly criticized the enforcement division’s toxic culture and called for reform, Gemini said it’s encouraged by these efforts. Still, it warns that fixing the division will require “serious introspection and long-term commitment.”
The complaint comes as Gemini pursues ambitious expansion plans, recently announcing plans to go public and reportedly nearing approval for a Malta license that would enable pan-European operations under new EU crypto regulations.
Edited by Sebastian Sinclair
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