Cryptocurrency exchange Gemini has filed a formal complaint with the Office of the Inspector General (OIG) of the U.S. Commodity Futures Trading Commission (CFTC), accusing the agency’s enforcement division of engaging in a prolonged and unjustified legal campaign.
According to Gemini, the CFTC’s seven-year investigation and eventual lawsuit were primarily based on allegations made by a former employee acting as a whistleblower.
Gemini Says Whistleblower Behind CFTC Case Was Later Found Guilty of Fraud by Arbitration Panel
Gemini claims that the whistleblower’s assertions were ultimately discredited by an arbitration panel, which found the individual had committed fraud and breached their fiduciary duties.
Despite this ruling, the CFTC allegedly continued its enforcement action against Gemini, culminating in a $5 million settlement earlier this year.
The exchange contends that the case never should have been pursued, as it was rooted in false claims and motivated by what it describes as “lawfare”—a term referring to the misuse of legal systems and institutions to damage or delegitimize an opponent.
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Gemini Alleges Regulatory Overreach, Cites Weaponization of Enforcement in CFTC Complaint
Gemini’s complaint raises concerns about accountability within regulatory bodies and criticizes what it sees as the weaponization of enforcement resources.
The firm argues that the CFTC’s decision to move forward with the lawsuit, even after the whistleblower’s credibility was undermined, reflects a failure of oversight and due process.
By taking the issue to the CFTC’s Inspector General, Gemini is seeking an independent review of the agency’s conduct, calling for greater transparency and integrity in how enforcement actions are initiated and pursued in the crypto sector.
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Gemini’s Complaint Stems from 2022 CFTC Lawsuit Over Alleged Misleading Statements to Regulators
Gemini’s complaint centers on a 2022 lawsuit filed by the CFTC, which accused the crypto exchange of making “material false or misleading statements” to regulators in 2017.
These statements related to the integrity of Gemini’s Bitcoin auction pricing mechanism, a critical component in the approval of Cboe’s launch of the first Bitcoin futures contract.
The CFTC claimed that Gemini failed to adequately disclose whether its pricing system could be manipulated—an issue with significant implications since the auction data was used to settle futures contracts. Gemini strongly denied the allegations but agreed to a $5 million settlement in January 2024 without admitting wrongdoing.
The company argues that the case was based on false claims from a whistleblower who was later found to have committed fraud, yet the agency pursued the lawsuit regardless.
This perceived misuse of regulatory power prompted Gemini to file a formal complaint with the CFTC’s Inspector General.