key takeaways
- The SEC accuses both Gemini and Genesis of offering unregistered securities to retail clients through the Gemini Earn program.
- Genesis currently owes Gemini customers $900 million.
- Gemini co-founder Tyler Winklevoss called the SEC’s actions “totally counterproductive.”
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The SEC accuses both Gemini and Genesis of offering unregistered securities to retail investors.
“Late to the game again”
The Genesis situation continues to worsen.
Yesterday the Securities and Exchange Commission archived charges against crypto lending company Genesis and crypto exchange Gemini for offering and selling unregistered securities through the Gemini’s Earn Program.
“We allege that Genesis and Gemini offered unregistered securities to the public, circumventing disclosure requirements designed to protect investors,” SEC Chairman Gary Gensler stated. “Today’s charges build on previous actions to make clear to the market and investing public that crypto lending platforms and other intermediaries must comply with our time-tested securities laws.”
Genesis is a subsidiary of Digital Currency Group. Genesis and Gemini established the Earn program in December 2020 to offer Gemini clients the ability to lend their crypto assets to Genesis and earn interest on them. However, Genesis froze their trading services immediately after the FTX collapse; the company currently owes $900 million to Gemini customers. Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert have been engaged in an increasingly public fight over the matter, with Winklevoss even calling on the DCG board to remove Silbert as CEO of the company. company in an open letter.
Tyler Winklevoss, co-founder of Geminis answered to the SEC’s Twitter filing, stating that the regulator’s behavior was “totally counterproductive” and that it was “optimizing political points rather than helping [Gemini] advance the cause of 340,000 users of Gain and other creditors”.
Representative Tom Emmer (R-MN) also criticized SEC approach: “Gary Gensler he is once again late to the game, ‘protecting’ no one. It’s pretty clear that his ‘enforcement regulation’ political strategy hurts ordinary Americans.”
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other cryptocurrencies.
