Investors have slammed a class action lawsuit on Gemini owners, the Winklevoss. In the report that was published, the investors said that the company sold high-yield products that were not defined as securities to them. The detail of the filing, submitted at a District court in the US, mentioned that the investors are leveling accusations of fraudulent dealings on the company and its management. Aside from that allegation, they also claim that the products violated other laws.
Users claim the company violated several laws
Gemini has been running its Earn program since 2015 for users to earn rewards on their crypto deposits. The accounts were run like a regular bank where users would deposit cash for some percentage of rewards over time. The Earn program rewarded users according to their digital assets, ranging from 0.45% to 8%.
The issue that spurred the lawsuit was an affiliate partner involved in the Earn program suspending withdrawals without notice. The case details were that they were engaged with FTX and had issues after the mishap that befell the exchange. Reports in January claimed that Genesis owed more than $900 million, which must be paid to users involved in the program.
Gemini promise to update investors
According to the complaint, the company has failed to back up its claims to honor their agreement. They also mentioned that some of the investors involved in the program had been wiped from the records. The investors also said that had Gemini initially registered the program, and they would have been provided with the basic information that would have helped them look into their risks and access them. Gemini has now turned its focus to a company interested in bailing them out of their financial woes.
The company said that all hands are on deck to work with the respective parties to resolve all the related issues very soon. The latest update by the company on Tuesday claimed that they had been working actively even during the Christmas holidays to ensure that the problems were solved. The company has also promised to provide users and the general public with a full and detailed statement on the state of things regarding the earn program. Meanwhile, the direction that the lawsuit would go is unclear, but the most certain thing is that thy Gemini might have a huge one on its hands.