Crypto Exchange Gemini Pushes Back on CFTC’s Call for Summary Judgment, Citing “Hotly Disputed Factual Questions”

News | June 21, 2024 By:

On Friday, June 7, 2024, Gemini Trust Co. pushed back against claims from the U.S. Commodity Futures Trading Commission (CFTC) that it omitted key details in its application to list a bitcoin futures contract on another exchange.

In a filing to a Manhattan federal court, Gemini argued that the CFTC’s push for summary judgment on claims that it failed to disclose risks is premature, as the claims involve “hotly disputed factual questions” that require fact-finding and a jury trial.

The CFTC has accused Gemini of omitting information related to its self-trading prevention procedures, loans provided to traders, and rebates offered to market makers when submitting its application through listing partner Cboe Futures Exchange.

However, Gemini maintains it had controls to prevent conflicts of interest in place and that loans did not enable market manipulation. It also says rebates were offered on a case-by-case rather than formal program basis.

Most importantly, Gemini argues the CFTC has not proven that these alleged omissions were material to its review of the contract application. The crypto exchange was denied access to CFTC deliberation records during discovery, limiting its ability to determine what factors the agency actually considered.

“Having successfully refused any discovery into whether the purportedly false statement could or did actually influence the CFTC’s decision, the CFTC cannot now claim that the absence of probative evidence transforms this question into a pure matter of law reserved for the court,” the filing said.

Gemini also pushed back against claims that it, rather than partner exchange Cboe, was legally responsible for statements made to the CFTC during the application process. It maintains it did not have “ultimate authority” over information Cboe transmitted to regulators.

If the case proceeds to trial, Gemini said factual disputes remain over every element of the CFTC’s claims. It argued a reasonable jury could agree the regulator has not proven the missing details were key risks or that Gemini knowingly withheld material information.

Please contact BlockTribune for access to a copy of this filing.