Winklevoss Twins Hit with Class-Action Lawsuit Over Fraud Allegations

• A group of investors have filed a class-action lawsuit against Gemini and its founders, Tyler and Cameron Winklevoss, accusing them of fraud and other crimes.
• The lawsuit alleges that Gemini offered unregistered securities in the form of interest-bearing accounts and that the Winklevoss twins violated the Exchange Act.
• Gemini halted investor withdrawals and refused to honor any further redemptions, wiping out investors’ assets in the program.

A group of investors have filed a class-action lawsuit against Gemini, a U.S. cryptocurrency exchange, and its founders, Tyler and Cameron Winklevoss, accusing them of fraud and other crimes. The complaint was filed in the Manhattan federal court on Tuesday, alleging that Gemini offered unregistered securities in the form of interest-bearing accounts and that the Winklevoss twins violated the Exchange Act.

In 2015, the twins launched Gemini which included a high-yield program called Gemini Earn. This product allowed clients to deposit their cryptocurrency in exchange for interest. Unfortunately, after the collapse of FTX, Alameda Research, and dozens of other crypto companies last month caused a liquidity problem at Genesis Global Capital, Gemini immediately halted withdrawals for the interest-bearing contract. As a result, investors were unable to access their funds and lost their assets in the program.

The lawsuit claims that the Winklevoss twins fraudulently induced investors to deposit their funds through false and misleading statements about the safety of the program. Furthermore, investors allege that Gemini failed to disclose the risks of investing in their platform, including the potential for Gemini to halt withdrawals and the potential for Gemini to refuse to honor any further redemptions.

The Winklevoss twins are now faced with a class-action lawsuit, which seeks compensation for the losses suffered by investors. While the outcome of this lawsuit is yet to be determined, it serves as a reminder that investing in cryptocurrency carries risks and that investors should always do their own due diligence before investing.

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