The National Association of Consumer Advocates, Inc. (NACA) has filed a high-stakes lawsuit against Gemini Trust Company LLC, the powerhouse behind a cryptocurrency platform with hundreds of thousands of active users. The lawsuit, brought in D.C. Superior Court, targets Gemini’s controversial user agreement, alleging that it unlawfully shifts the burden of fraud-related losses from Gemini onto its customers.
At the heart of the case are claims that Gemini’s terms violate D.C.’s local consumer protection laws and the federal Electronic Funds Transfer Act (EFTA), which safeguards consumers from unauthorized fund transfers. NACA, represented by Tycko & Zavareei LLP, Varnell & Warwick PA, and Schlanger Law Group LLP, argues that Gemini’s practices expose users to scams and unauthorized transactions without the recourse guaranteed by law.
“Gemini’s user agreement blatantly disregards the EFTA’s protections, forcing consumers to bear risks that rightly belong to the company,” said Daniel Schlanger of Schlanger Law Group LLP. “This lawsuit aims to stop these harmful practices and hold Gemini accountable.”
The complaint, filed under D.C.’s Consumer Protection Procedures Act (CPPA), seeks to ensure that consumers are no longer left unprotected by the fine print. According to Peter Silva of Tycko & Zavareei LLP, “The CPPA is a powerful tool to combat deceptive and unfair trade practices. Through this action, we intend to secure the rights and protections consumers deserve.”
The lawsuit highlights troubling accounts of Gemini users suffering significant financial losses due to unauthorized access to their accounts, with Gemini refusing to reimburse or provide assistance. “Consumers need assurance that their financial transactions are protected,” added Janet Varnell of Varnell & Warwick PA. “This case shines a light on critical gaps in Gemini’s compliance with both federal and local laws.”
NACA’s executive director, Ira Rheingold, emphasized the broader implications of the case: “Cryptocurrency platforms are a new frontier, but consumer protection laws remain clear. We are committed to ensuring that consumers can enforce their rights and not be buried by unfair contract terms.”
The lawsuit seeks to halt the enforcement of Gemini’s illegal provisions and compel the company to comply with established consumer protection laws. As the cryptocurrency industry continues to grow, this case underscores the importance of holding platforms accountable and ensuring consumer rights remain paramount.
