Money transfer, virtual currency, or money service -- Fraud or scam -- Complaint #4930281

Complaint Overview

Complaint ID: 4930281

Company: Winklevoss Exchange LLC

Product: Money transfer, virtual currency, or money service

Sub-Product: Virtual currency

Issue: Fraud or scam

State: Illinois

ZIP Code: 60634

Date Received: 2021-11-19T12:00:00-05:00

Date Sent to Company: 2021-11-19T12:00:00-05:00

Company Response: Closed with explanation

Timely Response: No

Consumer Disputed: N/A

Submitted Via: Web

Consumer Narrative

This is to complain against the Gemini Trust Company , LLC. XXXX Gemini. URGENCY : HIGH IMPORTANCE : HIGH [ WITHOUT PREJUDICE ] I wish to practice my right as a customer of Gemini to use your organisation 's service, seeking a formal, impartial investigation to amicably settle my dispute with Gemini. In order to clear up the myriad of letters and correspondences I have hitherto sent to Gemini respecting my complaint, I believe it will substantially strengthen both my case and your understanding, by taking a deeper look at the happenings of my case, and analysing the relevant facts in an objective and comprehensive fashion. It is crucial to note that I have been manipulated, socially-engineered and coerced to engage these fraudulent criminals. Much to my embarrassment, I recognize that I am the victim of an investment scam. My complaint to the CFPB has arisen as I do not consider, by any stretch of the imagination, the conduct of Gemini to be commensurate with their legal role and responsibility to their customers. They sell a service to look after their customers, protect their money and are a financial institution that maintains a traditional relationship and way of working with its customers. During the complaints process with Gemini, I found their communication ineffective, which further hides their conduct to management and diminishes the service offering to their clients. They are struggling to adapt their business offering in the ever-changing world of IT development. The internet is presenting a real problem which they choose to manage in a way which is not in line with rules and regulations of CFPB as well as their own internal policy and procedures sold to their clients. General Obligation : Commencing on or about XX/XX/2021, I fell victim to two multi-layered scam operations run by XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX / XXXX which involved me making deposits for a total amount of XXXX USD from my Gemini account to these fraudulent investment companies. When determining whats reasonable and fair, we should focus on the issue of liability ; common queries include, but are not limited to, the following ( i ) whether Gemini did not take notice of any rule, law, or regulation, and/or possibly missed any material elements of the relevant bylaws or codes of conduct, that may have prevented them from protecting my financial safety ; ( ii ) whether by virtue of Geminis custodianship over my funds or by its control over them, they owed a fiduciary duty to the me and if so, whether that duty was breached ; ( iii ) whether Gemini promoted the transaction ( s ) in question despite being aware of the nature of the transaction ( s ) in question ( iv ) whether Gemini was in compliance with its own policies and procedures ; ( v ) whether Gemini owed duties to myself, what the scope of those duties was, and whether Gemini did not uphold those duties ; ( vi ) whether Geminis conduct was unfair ; and ( vii ) whether Gemini has within its power the ability to, and should, compensate me for the harm that has befallen me. Upon identification of such unusual or suspicious activity, it is crucial that the relevant staff member adequately describe the factors making an activity or transaction suspicious, thoroughly depict the extent and nature of this activity and properly communicate to the customer that such activity meets the relevant criteria of fraud. In providing its services to a customer, a financial institution is required by law to exercise the care and skill of a diligent, prudent organization. In this case, this means that the payment service provider should not turn a blind eye to known facts pointing to a real possibility that their customer is being scammed. In other words, Gemini must have had special knowledge of what was occurring or been alerted to a real possibility of fraud taking place. The financial institution must have known or reasonably ought to have known that I was dealing with a scammer. Granted, there is room for diversity of view insofar as reasonableness is concerned. Indeed, there is a sense in which the standard of care of the reasonable person involves in its application a subjective element. However, it must be remembered that the correct test is always reasonable care in all circumstances, not average care. The fact that most people behave in a certain way may be good evidence that the conduct is reasonable, but this is not necessarily the case. Although reasonableness is a very fluid concept, all of the evidence suggests that Gemini did not foresee the fraud and disregarded even the most obvious dangers in this respect. Situations do tend to repeat themselves and it is advisable to examine previous outcomes to see how the standard of the reasonable person should be applied, and that lessons can be learnt from the errors of the past. Geminis Position : On XX/XX/2021, Gemini wrote in a letter Once digital assets leave your Gemini account, they can not be recovered. The reason behind this is due to a concept known as transaction finality. Transaction finality is a function of decentralized blockchains. It means that once the transaction has been broadcast to the network and confirmed on the blockchain, the transaction is irreversible. Refuting XXXX arguments from a purely logical perspective : XXXX position is that the features of the situation at hand do not generate a genuine obligation to protect innocent and helpless victims ; they are essentially arguing that common-sense-based approaches are doomed to fail, leaving their exclusively technical account of the subject matter as the only meaningful choice. For reasons which are unclear, this extremely serious situation barely gets the attention it deserves even though ample evidence has been offered in support of this complaint. In XXXX view, it is implied that we should not home in ( and consequently rely ) on unwritten laws, practicality, good judgement, reasonableness, sharpness, sensibleness, past outcomes, and insight, when taking appropriate precautions. To underscore, once again, such views are at odds with common sense and are wildly irresponsible. Imagine a view according to which the one and only thing that can make Gemini morally obligated to do something is having it written down somewhere. Pursuant to this view, if Gemini encounter the suffering of totally naive victims, they are only obligated to intervene in or remedy the situation, to the degree required by written material. This is unbecoming for a reputable establishment such as Gemini. I have reviewed the material hereto sent by Gemini carefully, and it unfortunately provides no response to my fundamental argument concerning the degree of care. Given its size, influence, and the resources at its disposal, this establishment clearly had a far greater capacity than an individual such as myself had, to determine the level and likelihood of risk that a client such as myself is subjected to and had a duty to intervene as they now do to query in particular out-of-pattern transactions of this kind. It is perfectly obvious that Gemini, inadvertently, employs a subtle approach in addressing some of the key questions in a manner which neither provides me with adequate support nor protects anything other than its own interests. It is Gemini here, who has the burden of proof, to show that it has exercised the duty of care, that is to say, that Gemini adhered to a standard of reasonable care in relation to the matter at issue given its extensive experience compared to mine. It is Gemini that claims that the damages which I have suffered in connection to this matter have not been reasonably foreseeable, and that my proposed degree of care is not, and has not been, commensurate with Geminis capacity, experience, expertise, or scope of services in any way. To reemphasize, Geminis indisputable overriding purpose is by no means to purely execute transactions in a blind and blank fashion, but rather to strike a balance between executing those transactions and capitalizing on its undeniably vast capabilities to protect consumers thereby enhancing market integrity. Gemini is obliged to take some action if it is sufficiently aware of a real possibility that a fraud may be being perpetuated. If they don't question its customers instructions or raise the possibility of a scam with the customer in these circumstances, it may be liable if the red flags indicate the customer is : particularly vulnerable, or if the possibility of fraud was serious or real, not just suspected. There are some recommendations to organisations for protecting customers from financial harm that might occur as a result of fraud or financial abuse ; and gives guidance on how to recognise customers who might be at risk, how to assess the potential risks to the individual and how to take the necessary actions to prevent or minimise financial harm.

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Disclaimer

This analysis is AI-generated based on publicly available CFPB complaint data. It does not constitute financial or legal advice.

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