Have you lost money to a cryptocurrency exchange that misrepresented its financial strengths while downplaying risks? If so, you may be eligible to join a class action lawsuit.
Investors large and small have lost tens of billions of dollars to cryptocurrency exchanges in recent months. Most notably, FTX and its founder, Sam Bankman-Fried, have produced global headlines in their epic spiral into bankruptcy and perhaps criminal accountability. But the problems extend well beyond FTX. Attorneys are investigating how other platforms overplayed the financial strengths of their companies to consumers while hiding risks. Investors could pay a hefty price for the alleged mischaracterization of investments at cryptocurrency exchanges. Such companies are under intense regulatory and legal scrutiny
Have you lost money or assets after lending currency on a cryptocurrency exchange platform? If so, you may qualify to participate in cryptocurrency exchange lawsuit investigation.
Fill out the form on this page for more information.
FTX is one of many cryptocurrency exchanges that allow customers to trade digital currency for other assets, such as other cryptocurrencies or even conventional money. FTX has been accused of embezzling customer assets and/or using them for illegal purposes. Bankman-Fried has been charged with wire fraud, securities fraud, lying to investors, and other charges. Investors who held their money in FTX’s exchange lost billions of dollars. The collapse has led to disruption and major concerns about other exchanges, and whether they, too, lied to consumers.
Gemini, for example, is an exchange that offers a product called “Gemini Earn,” which allowed lenders to lend their currency to institutional partners. The company allegedly advertised that investors could earn interest on the crypto they loaned to others, meaning they could make a profit.
But attorneys investigating the exchange say Gemini’s lending partner, Genesis, was not financially sound and was riskier than represented. Unfortunately, Genesis, now on the brink of bankruptcy, has frozen all Gemini Earn accounts, resulting in a loss of nearly $1 billion in digital assets. Genesis misrepresented material facts concerning its financial strength and its risk portfolio and has inappropriately frozen account withdrawals. On its part, it is alleged that Gemini failed to protect its customers by, among other things, performing an adequate audit of Genesis’s financial condition before partnering with Genesis as its lending partner.
The federal government’s Commodity Futures Trading Commission, in June of 2022, filed a complaint against Genesis, sharing that the company made “false or misleading statements or omitting to state material facts to the CFTC in connection with the self-certification of a bitcoin futures product.”
A class action lawsuit was filed recently claiming that Gemini sold interest-bearing accounts without registering them as securities, according to an article by Forbes. Gemini sated it is “committed to providing a secure and compliant platform,” adding it will “vigorously defend itself against these baseless allegations,” according to the article.
Another exchange, BlockFi, also recently filed for bankruptcy protection. Employees at the exchange warned of credit risks, but executives ignored the warnings and misrepresented its portfolio risk to its customers. The Securities and Exchange Commission found that BlockFi violated security laws by making false and misleading statements for more than two years concerning the level of risk in its portfolio and lending activities. But BlockFi is blaming its financial woes on FTX and “crypto market volatility.” As a result of the SEC’s charges, BlockFi agreed to pay $100 million in penalties, cease its unregistered offers and sales of its lending product.
At best, these exchanges misrepresented the financial strengths of their companies while downplaying their portfolio risks. At worst, these exchanges were nothing more than sophisticated Ponzi schemes that stole billions of dollars from their customers. In either case, large institutional and smaller retail investors alike have lost tens of billions of dollars.
Have you lost money on any of these cryptocurrency exchanges? If so, you may qualify to participate in cryptocurrency exchange lawsuit investigation.
Fill out the form on this page for a case evaluation.
By submitting your information, you agree to receive communications from Top Class Actions and to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify.
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