Gemini, Winklevoss twins hit with new lawsuit seeking class-action status

Quick Take

  • A lawsuit seeking class-action status was filed Thursday against crypto exchange Gemini and its founders, the Winklevoss twins.
  • The complaint accuses the firm of making “false and misleading statements to promote Gemini Earn.”

Crypto exchange Gemini and its co-founders, Tyler and Cameron Winklevoss, were hit with a lawsuit that's seeking class-action status.

The main plaintiff, Joshua Berdugo, invested $13,000 in Gemini Earn and accused the twins of defrauding hundreds of thousands of investors by ''luring unsuspecting investors into purchasing unregistered securities.''

The Securities and Exchange Commission charged Gemini Trust Company this week, along with DCG's Genesis Global Capital for the alleged offer and sale of unregistered securities to retail investors through a Gemini crypto lending program.

The lawsuit claims "Gemini made repeated false and misleading statements to promote Gemini Earn."

For instance, Gemini's website said it partnered with "vetted and accredited third party institutional-grade borrowers," when in reality it only partnered with one, Genesis, the complaint said.

It also accuses the exchange of failing to disclose to Gemini Earn investors that Genesis could not honor redemptions in Gemini Earn after it became known that Genesis had significant exposure to troubled crypto hedge fund Three Arrow Capital.

Berdugo pointed to specific tweets by the Winklevoss twins, like one from Nov. 9 where Cameron Winklevoss stated Gemini had no material exposure to FTX or Alameda Research. Those comments were ''entirely misleading and/or false,'' Berdugo alleged.

Gemini did not immediately respond for a request to comment.

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