Prior to the scheduled trial in the U.S. District Court for the Southern District of New York, the parties reached a settlement in this FinTech matter.
Retained by Baughman Kroup Bosse
The Commodity Futures Trading Commission (CFTC) alleged that Gemini Trust Company LLC (Gemini) made false or misleading statements and omissions to CFTC staff during the self-certification process for a futures contract for bitcoin (BTC). Among other allegations, the CFTC alleged that Gemini did not disclose that certain Gemini customers obtained loans of digital assets (primarily BTC) at “low or below-market rates” from a related entity.
Defense counsel retained Cornerstone Research to support Angelo Chan of 8C Management to review and assess the BTC loans. Mr. Chan performed the following analyses:
- Assessed the context of the nascent lending environment for BTC during the relevant timeframe;
- Evaluated relationships with the borrowers and the business model of the borrowers; and
- Reviewed the loan attributes and the parties’ negotiations to reach various loan terms.
Based on these analyses, Mr. Chan found that the at-issue BTC loans were not made at “low or below-market rates.”
Prior to the scheduled trial in the U.S. District Court for the Southern District of New York, the parties reached a settlement.