A crypto exchange founded by the Winklevoss twins moved from Dublin to Malta earlier this year as it wanted a "more friendly regulator" after it was warned it was at risk of running an "illegal business model", a barrister acting for a former compliance chief has said.
The former head of compliance in Europe for Gemini, Kian Pettit, has alleged that he was sidelined and left "totally outside the loop" after warning in May 2024 that the firm would fall foul of EU crypto trading regulations.
Gemini, founded by US tech investors Cameron and Tyler Winklevoss, has said claims by Mr Pettit that he was penalised as a whistleblower and forced out of his job don't "stack up".
Mr Pettit's complaints under the Protected Disclosures Act 2014 and the Unfair Dismissals Act 1977 against the Irish subsidiary of the global payments group, Gemini Payments Europe Ltd, are denied.
Mr Pettit told a hearing today that he took a pay cut to join Gemini because he wanted to take a leadership role in securing its authorisation to trade in the EU. He quit effective 28 February this year, the tribunal heard.
He told the WRC that he authored a document in May 2024 on a new pan-European law, the Markets in Crypto-Assets Regulation (MiCA), which was due to start coming into force from the end of last year.
He explained that a "crucial" part of the rules was "price improvement": that an exchange processing a crypto trade give the customer the benefit in the event of a price shift between the the placing of an order and its execution.
Gemini's operating model, however, was to execute the trade at a guaranteed price and to retain the improvement in certain circumstances.
"Where the price movement is in favour of the customer, this is where the requirement to deliver price improvement arises under the law," Mr Pettit said.
He said his concern was that it was "very clear here that that would not be the case" under Gemini's operating model.
"My client's position is this was unlawful. Bear in mind that the complainant is the head of compliance; this is his stock in trade," said Cillian McGovern BL, appearing for Mr Pettit.
"In effect, this highlights that the respondent company would be breaking the law," he said.
In further evidence, Mr Pettit said the initial reaction was that there were issues to address in light of the impending regulations. The senior leadership team in the crypto exchange decided in late May 2024 they would press on with the process of seeking authorisation in Ireland, he said.
He said "everything stopped" within a fortnight and there was "total and utter silence" for another eight weeks in relation to the authorisation process.
Mr Pettit said the next update he got was to be told on a conference call in July 2024 that the founders of the company had decided to seek authorisation from the Maltese regulators instead.
He recalled the company’s global general counsel, Tyler Meade, stated on the call: "The train had left the station for Malta."
Mr Pettit said he had "zero" input in the decision.
The tribunal heard later that Mr Pettit set out in his letter of resignation that the company sent representatives to a meeting with Maltese officials "unbeknownst to the senior EU leadership team" to discuss the "migration of assets" from Dublin.
Mr McGovern BL said that following Mr Pettit’s report, the complainant suffered a "complete erosion" of his position in the firm.
"There was nothing left for him to do. His position was entirely watered down. He had a serious concern that the company was engaging in illegal trading practices. In moving over to Malta, they continued," he submitted.
In a legal submission, Owen Keany BL, for the crypto exchange, said: "This contention that there's been an erosion in his role because of a structural change because a licence was applied for in Malta as opposed to Ireland is just a complete nonsense. The claim doesn’t stack up."
Mr McGovern said it seemed to be the company’s position that if its head of European compliance told it that it was going to be running "an illegal business model in one jurisdiction, it's entitled to go to another European jurisdiction and run the same model".
He said the company had made the decision to look for a "more friendly regulator".
Mr Keany said the sections quoted from Mr Pettit’s report "do not identify any illegality" which he said would be essential to sustain the position that Mr Pettit made a protected disclosure.
Mr Pettit said that all he had been left with was the compliance work for "two very small regulated businesses" in Ireland, which took just "a couple of hours a day, including coffee breaks".
"It seemed to me I was the problem, not the operating model. Push me aside and let me push some paper here until they got fully operationalised in Malta – that was the effect," he added.
Mr Keany said the sections quoted from Mr Pettit's report "do not identify any illegality" which he said would be essential to sustain the position that Mr Pettit made a protected disclosure.
"Prior to the institution of these claims on 1 April 2025, there was not even a whisper from the complainant that he was making a protected disclosure or that he felt he had been penalised for making a protected disclosure," counsel added.
He further submitted that Mr Pettit's constructive dismissal claim could not succeed on the basis that the complainant had not invoked the company grievance process prior to resigning.
"I think it's the first constructive dismissal [case] based on an alleged breach of contract I’ve been in where you haven’t been shown the contract and the alleged term breached," Mr Keany told adjudication officer Pat Brady.
"You haven’t been invited to go to the contract because if you did, it'd reveal there is nothing to the argument - Mr Pettit’s role remained intact," he said.
"I would urge you to find there hasn’t been a case to answer and dismiss both [complaints] on that basis," Mr Keany said.
Mr Brady adjourned the case after saying he would reflect on the position and would write to the parties if he felt the need to reconvene. "If not, I’ll proceed to issue a decision," he said.
Mr Keany was instructed by Byrne Wallace Shiels LLP in the matter, and Mr McGovern by Crushell & Co Solicitors.
