The U.S. District Court for the Southern District of New York recently filed a consent order against New York-based trust company Gemini Trust Co. LLC, ordering the company to pay a $5 million civil monetary penalty.
The order found the company had made materially false or misleading statements or omissions to the Commodity Futures Trading Commission (CFTC) from approximately July 2017 to December 2017 regarding a bitcoin futures contract.
“Making false or misleading statements to the CFTC in connection with a derivatives product certification undermines the CFTC’s efforts to ensure all futures products trading on CFTC-regulated markets comply with the [Commodity Exchange Act] and CFTC regulations and, among other things, are not readily susceptible to manipulation,” Ian McGinley, CFTC director of enforcement, said. “This result sends a strong message that the commission will act to safeguard the integrity of the market oversight process, regardless of whether the market involves complex digital asset derivative products or more traditional commodity futures.”
The order is the result of a complaint the CFTC filed against Gemini Trust on July 2, 2022. During the self-certification process for the contract, Gemini Trust, through its representatives, made certain statements, or failed to disclose facts, that the company should have known were false or misleading.