Consumer complaint received 2022-11-30
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Confusing or missing disclosures — 
Company: Winklevoss Exchange LLC (FL)

On XX/XX/2022 the cryptocurrency exchange Gemini announced that customer funds tied up on the earn platform held with XXXX XXXX XXXX would be temporarily unavailable for an unspecified amount of time. XXXX XXXX reported that sources familiar with the matter stated that there were approximately {$780.00} XXXX  dollars in customer funds tied up on the platform. 

XXXX is cryptocurrency lending company that would take deposits similar to a traditional bank and then reloan them in exchange for an interest rate on digital cryptocurrency assets. I had an exchange account with Gemini where I held approximately {$8000.00} in funds. 

A majority of these funds were transferred into earn as late as XX/XX/2022. The balance held before this was only {$3000.00}. On XX/XX/2022 Gemini published a statement on their company blog stating that they were " Built on Trust, Safety, and Compliance '' and making extensive notations that " they have no material exposure to XXXX XXXX XXXX XXXX XXXX '' and that they would be unaffected by the recent exchange failure of the XXXX based XXXX XXXX XXXX. 

https : //www.gemini.com/blog/gemini-is-built-on-trust-safety-and-compliance At no point did they publish anything relating to Gemini Earn, which they had previously extensively advertised as a " cryptocurrency savings account. '' Gemini used it's position as a regulated as a major marketing feature for earn. Gemini had previously stated that : " Gemini is partnering with accredited third party borrowers including XXXX, who are vetted through our risk management framework which reviews our partners collateralization management process. On a periodic basis we will conduct an analysis of our partners cash flow, balance sheet, and financial statements to ensure the appropriate risk ratios and healthy financial condition of our partners. '' XXXX XXXX XXXX : //www.gemini.com/earn At no point did Gemini disclosure the level of counterparty or asset concentration risk they were taking on, or that one of their debtors accounted for 48 % of their asset portfolio, or that they had nearly 10 % of their loans tied up with investments tied to the XXXX cryptocurrency exchange. 

Gemini did have legal disclosures in place in their Terms and Conditions of service, but their marketing material made extensive note of the fact that they were regulated as a Money Services Business by the XXXX XXXX XXXX XXXX XXXX XXXX. 

https : //www.gemini.com/blog/an-important-message-regarding-gemini-earn Gemini 's earn statement states that funds are available for withdrawal within 5 days and that they are simply " disappointed that they will not be able to meet customer redemptions within the service-level agreement ( SLA ) of 5 business days. '' Gemini has not provided any updates since the XX/XX/2022 announcement, nor has adequately advised on what the current status is on their earn product or efforts either they or XXXX are making towards resolution. Instead choosing to go radio silent about the matter and remove any mention of the Earn product from the main page of their website. 

Gemini 's own contact states does not include a provision for suspension of all withdrawals extension of this time period. The contract states the following : " Once you request a return of your Available XXXX XXXX through our Program user interface, you will generally receive these XXXX XXXX within five ( 5 ) business days. However, repayment terms are set forth in the Loan Agreement and the terms of your Loan Agreement may provide for a longer repayment period. While Available XXXX XXXX are in the process of being returned, they will not be available for trading, transfers or withdrawals. Withdrawals from our Program to external addresses are subject to additional verification by us. While withdrawals from our Program to your Gemini Account are currently free and unlimited, we reserve the right to limit the frequency of withdrawals and/or charge an administrative fee in the future. '' https : //www.gemini.com/legal/gemini-earn-program-terms-and-authorization-agreement # section-9-agent-fees