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The U.S. Commodity Futures Trading Commission launched an investigation into the Gemini cryptocurrency exchange.
The Gemini cryptocurrency exchange has become a defendant in an investigation by the US Commodity Futures Trading Commission (CFTC). This is reported by the Law360 web portal, citing sources close to the investigation.
What exactly caused the investigation is not specified. According to Law360 journalists, the CFTC initiated an investigation after the U.S. Attorney’s Office for the Southern District of New York dropped the investigation against the Winklevoss twin exchange in April 2021.
The investigation came to light after Gemini filed court documents detailing the outcome of an arbitration with the former chief operating officer of the crypto exchange, Ben Small. According to Law360, Small stepped down from his job after reporting illegal financial transactions from Gemini’s lender Pearl Street Loans to regulators.
Gemini is now seeking $5 million in legal fees. Officially, Gemini did not comment on reports of the CFTC investigation.
Read also: Gemini Offers Hong Kong Services Banned by Coinbase
Earlier, the editors wrote that Gemini, as well as Celsius Network and Voyager, became defendants in an investigation by the US Securities and Exchange Commission (SEC). According to the media, the SEC wants to find out if the crypto lending services of companies fall under the securities.
In particular, crypto-currency deposit services were targeted. The interest rates offered by cryptocurrency lenders are way ahead of US banks. This imbalance is what the SEC is concerned about.
Gemini confirmed that the regulator contacted the exchange. However, they noticed that they were not the only company with which the SEC communicated. Despite the initiation of an investigation, at the time of writing, no charges have been officially filed against Gemini, Voyager or Celsius Network.
Read the BeInCrypto editorial about why Australian crypto companies were puzzled by the partnership of a local bank with Gemini.
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