Will the Winklevoss twins be the next crypto kings to fall? Investors launch fraud class action lawsuit against brothers claiming they duped clients out of $900m
- Winklevoss twins crypto platform Gemini halted withdrawals in November
- He is owed nearly $1 billion by crypto-lending platform Genesis
- Gemini Investors Say They Didn’t Know Their Money Wasn’t Safe
- Two have launched a class action lawsuit urging all Gemini investors to sue
- The collapse of Genesis and in turn of Gemini is linked to the fall of FTX
Cryptocurrency investors who placed money with the Winklevoss twins and their Gemini platform are being urged to sue the brothers in a new class action lawsuit that ties the couple and their business to the FTX collapse.
Two investors – Brendan Picha and Max J. Hastings – have filed a class action lawsuit in New York City Tuesday which claims to have been starved of investments earlier this year.
The lawsuit describes how the pair, and others, purchased Gemini Interest Accounts — “GIAs” — that they believed were safe, interest-earning parking spots for their crypto assets.
Instead, they claim the Winklevoss twins – who are worth a combined $6 billion – fraudulently sold these assets to crypto lender Genesis Global Capital.
When FTX crashed in November and sent shockwaves through the crypto world, Genesis ran out of money and Gemini, the Winklevoss’ company, found itself trying to recover $900 million.
Cameron and Tyler Winklevoss are being sued by two of their Gemini Earn clients. Gemini Earn lost $900 million in November when FTX and Genesis Capital, a crypto lending platform he was trading with, crashed.
Two Gemini Earn investors, Brendan Picha and Max Hastings, are suing the twins claiming they are among dozens, if not hundreds of investors who have lost money
Tuesday’s trial is the first sign of legal trouble for the couple since the crash.
It comes after the indictment of FTX founder Sam Bankman-Fried, who is currently under house arrest in California awaiting trial on eight counts of fraud and money laundering.
Prosecutors say he used FTX as a “personal piggy bank”, funneling money to his other company, Alameda.
The Winklevoss twins have yet to respond to the lawsuit.
On the Gemini website they claim they are working around the clock to return the investment to the GIA holders and seem to put all the blame on Genesis.
In the latest update, they said: “We have continued to work over the Christmas holidays to find a solution.
“We expect a more comprehensive update by the end of this week.”
The lawsuit describes how investors were allegedly led to believe that holding a GIA was a safe and risk-free way to earn interest on crypto assets.
Fallen FTX founder Sam Bankman-Fried is now under house arrest at his parents’ home in California. He faces spending the rest of his life in prison for money laundering and fraud
“Gemini marketed GIAs with repeated false and misleading statements, including that GIAs were a secure method of collecting interest,” the lawsuit states.
Instead, the lawsuits describe the accounts as “unregistered and highly speculative securities.”
When Genesis ran into financial difficulties following a series of crypto market crashes in 2022, including FTX Trading Ltd, Genesis was unable to return the crypto assets it had borrowed to Gemini Earn investors.
“The Winklevosses, by virtue of their control over Gemini during the Class Period, had the power and authority to direct the management and activities of Gemini and its employees, and to cause Gemini to engage in the conduct wrongdoing described herein,” the lawsuit states.
Gemini’s website is full of panicked statements, assuring investors they will be cured
Hastings claims he held the equivalent of $60,073 in Bitcoin cash in his GIA while Picha’s balance, as of Nov. 18, was listed as just $6.
The pair is, however, inviting everyone else who has parked their Bitcoin tokens with Gemini to join them, which could result in a total loss of almost $1 billion.
The Winklevoss twins got their start with Facebook.
They sued Mark Zuckerberg, claiming he stole their idea for world-changing social media, and used much of their $65 million settlement from that case to buy cryptocurrency from the dawn of industry.
They founded Gemini in 2014.
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