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CFTC sues Gemini over its 2017 bitcoin futures launch – Axios

The Commodities Futures Trading Commission (CFTC) has sued the exchange, Gemini, over selling cash settled bitcoin futures products starting in 2017.
Why it matters: From the very beginning, Gemini has always positioned itself as the most pro-regulation, by the book actor in crypto. The fact that it's getting sued could represent a very aggressive signal from the Biden administration.
The details: The case hinges on assurances that Gemini staff made to the CFTC that its futures market could not be manipulated. Gemini announced its futures product on Dec. 8, 2017, basically at the crescendo of the initial coin offering-driven bull market of that year.
The complaint alleges that Gemini staff misrepresented how their business operates, withholding key information from regulators. It states:
According to the complaint, Gemini and the CFTC were in discussions from July to December of 2017, and that's when the misleading statements were made. It further contends that:
The suit also goes into other aspects of how Gemini operated its market, which the CFTC says put the prices on its auction in jeopardy of manipulation which would also make its futures product subject to manipulation.
What they're saying: “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,” said a statement from Gemini shared with Axios via FTI Consulting.
Bottomline: The commission seeks a jury trial in pursuit of various kinds of relief, but the phrase in the CFTC's release that jumps is the "disgorgement of ill-gotten gains."


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