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Crypto investors sue Winklevoss twins over interest accounts on Gemini

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Crypto investors sue Winklevoss twins over interest accounts on Gemini

Gemini accounts

Crypto Investors Sue Winklevoss Twins Over Interest Accounts on Gemini

Three customers of the Gemini cryptocurrency exchange run by the Winklevoss twins, Tyler and Cameron, have sued the high-profile siblings and the exchange in a class action lawsuit.

The plaintiffs allege that the Gemini exchange and the Winkelvoss brothers have failed to return the interest earned from their involvement in the exchange’s interest-bearing accounts, leaving customers out of pocket.

The Allegations

The complaint was filed on August 10 in New York state court, and lists the Winklevoss twins and the Gemini Trust Company LLC as defendants. The plaintiffs brought the lawsuit on behalf of themselves and all those who held a Gemini account between April 16, 2019 and August 9, 2020.

The complaint alleges that, on April 16, 2019, Gemini initiated interest-bearing accounts payable to users on a weekly basis. The plaintiffs claim that they were enticed and induced to open accounts with Gemini because of the ability to receive interest payments.

However, the plaintiffs allege that they are now being denied the payments they are due, as Gemini has ceased making payments to interested Gemini users. The complaint further states that the defendants have not notified customers that their interest has been withheld or otherwise ceased.

The plaintiffs also contend that the defendants failed to disclose that their interests accounts were not insured.

Seeking Repayment

The plaintiffs are now seeking repayment of their accounts plus interest, as well as punitive damages.

The suit further accuses the Winklevoss twins of breach of fiduciary duty and fraud, stating that they “knowingly and intentionally” misrepresented the terms of their interest-bearing accounts.

The suit seeks to recover damages on behalf of the class members and any others who were affected by the defendant’s conduct.

The Final Word

The lawsuit against the Winklevoss twins and the Gemini Trust Company LLC is a serious one, and could have far-reaching consequences for the exchange and its customers.

It remains to be seen what the outcome of this case will ultimately be, but it highlights the importance of clear and concise disclosure when offering financial products. Investors should always be aware of the terms and conditions of their accounts before making any investment decisions.

Crypto investors are suing the Winklevoss twins, Tyler and Cameron, the founders of Gemini, the cryptocurrency exchange, over their recent decision to offer interest-bearing accounts that they claim is an illegal securities offering.

A lawsuit was filed in California federal court on March 11th, with four claimants accusing the Winklevoss brothers of fraud, breach of fiduciary duty, negligence and breach of the Exchange Act. The SEC had allowed Gemini to offer its Bitcoin Interest Program, but the claimants argue that this program is in essence a security that should not be publicly traded.

The Bitcoin Interest Program is a savings account of sorts, with users allowed to earn up to 6.25% APY on Bitcoin balances held in their Gemini accounts. The interest is paid in Bitcoin as well.

The lawsuit alleges that the Winklevoss Twins failed to disclose “material facts and risks” associated with the interest accounts, such as the fact that the Bitcoin held in those accounts could be subject to market fluctuation, which could result in loss to the customer.

The lawsuit also alleges that the Winklevoss Twins had no registration or disclaimer on their website to inform customers of the risks associated with the Bitcoin Interest Program.

The lawsuit is seeking damages and a judicial order mandating Gemini to stop offering the Bitcoin Interest Program.

The Winklevoss Twins have yet to comment on the lawsuit, but it has provoked a major controversy in the crypto market as many investors are concerned about the risks associated with the Bitcoin Interest Program.

At the moment, it is uncertain how the lawsuit will unfold, but it is clear that many investors are unhappy with the Winklevoss Twins and their decision to potentially offer a securities offering without proper disclosure. As the case proceeds, we will have to wait and see how it develops.

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