American regulator: Gemini Bitcoin Futures Application Was Misleading – Bits Media

US Commodity Futures Trading Commission (CFTC) filed a complaint against Gemini Trust Company in the District Court for the Southern District of New York.

The regulator claims, which is approximately from July to December 2017 year, the company misled the supervisory authority in an attempt to obtain approval its Bitcoin futures product.

The Gemini product was launched at the end 2017 year together with Cboe Global Markets. The specificity of the product was, that the Bitcoin contract had to be concluded the day before expiration based on an auction, conducted by Gemini, - to ensure a close correlation between futures and the BTC spot price.

According to the CFTC complaint, the crypto exchange misled the regulator about the principle, on which the auction works. The exchange claimed, that all bets must be pre-funded by traders, and that increasing traders' costs will make their futures product less susceptible to manipulation. However, the company subsequently allowed some individual bidders to begin trading before, how their account was funded.

The supervisory authority approves, that Gemini offered incentives in the form of rebates and fee shifts to increase trading volume. The company also provided trading incentives to some of its individual clients, without reporting them publicly.

As part of the charges, the CFTC is seeking monetary penalties and, perhaps, ban on trading and registration on the stock exchange, if the court deems such a measure necessary.

Earlier, CFTC Commissioner Caroline Pham said, that investing in digital assets is like buying lottery tickets.