Gemini has accused the Commodity Futures Trading Commission (CFTC) staff of waging a “trophy-hunting lawfare” campaign based on “fabricated” statements and unfairly weaponizing the Commodity Exchange Act (CEA) against the crypto exchange for over seven years.
Last week, Gemini Trust sent a letter to the Commodity Futures Trading Commission’s Inspector General, Christopher Skinner, to raise multiple concerns and complaints about the agency’s Division of Enforcement (DOE) conduct against the crypto exchange over the past seven years.
The June 13 letter accuses the DOE staff of “selectively and unfairly” weaponizing the Commodity Exchange Act to “bring dubious false statements charges against Gemini Trust” and “taking a series of legal positions that are contrary to basic principles of due process and good governance.”
In 2022, the CFTC sued Gemini, claiming that the exchange issued “false and misleading statements” regarding its actions to prevent market manipulation in Bitcoin (BTC) prices in 2017. The complaint alleged that the crypto exchange gave deceiving information to the CFTC as it evaluated a possible self-certification for a BTC futures contract.
According to Gemini, the agency’s staff conduct over the past seven years shows that its “trophy-hunting lawfare” was not motivated by a desire to protect the commodities markets. Instead, it was allegedly driven by the DOE personnel’s “selfish desire to advance their careers by misusing their offices to obtain a high-profile ‘win.’”
Additionally, the company argues that the DOE ignored the fact that Gemini Trust was “the victim of fraudulent activity by multiple bad actors” or that the claims originated from a “lie-riddled whistleblower submission by a discredited former employee,” former CPO Benjamin Small, who reportedly embarked on a “vindictive campaign” after he was fired.
Based on this, the letter claims that the DOE Staff consistently abused their office and willingly burned millions of dollars of taxpayer money to sue an “innocent party” and “pursue fabricated and manufactured claims against Gemini Trust.”
The crypto exchange also claimed that “there is something deeply wrong with the DOE and its culture,” adding that it is well known that the division is “out of control” with a “toxic” philosophy.
They consider that the public statements and remarks from CFTC acting chair Caroline Pham have shown how the DOE “has lost its way.” Recently, she criticized the previous administration’s “regulation by enforcement” approach, affirming that the agency is working to restore regulatory clarity.
The agency’s acting chair claimed that the CFTC will no longer “twist the law to criminalize an asset class or a technology,” focusing instead on its “core mission” to catch bad actors and prevent fraud, manipulation, and scammers in the market.
Gemini Trust concluded in the letter that the CFTC’s transformation “will require serious introspection and long-term commitment from the agency as a whole to ensure that this bad-faith behavior never happens again,” and offered to “assist the Commission and Inspector General in whatever capacity they would deem helpful.”
