Key points to remember
- The SEC accuses both Gemini and Genesis of offering unregistered securities to retail customers through the Gemini Earn program.
- Genesis currently owes Gemini customers $900 million.
- Gemini co-founder Tyler Winklevoss called the SEC’s actions “completely counterproductive.”
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The SEC accuses both Gemini and Genesis of offering unregistered securities to retail investors.
“Again late for the game”
Genesis’ situation continues to worsen.
Yesterday the Securities and Exchange Commission deposit charges against crypto lending firm Genesis and crypto exchange Gemini for offering and selling unregistered securities through 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 said. “Today’s charges build on prior actions to make clear to the market and the 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 set up the Earn Program in December 2020 to provide Gemini customers the opportunity to lend their crypto assets to Genesis and earn interest on them. However, Genesis froze its buyout services immediately after FTX’s collapse; the company currently owes Gemini customers $900 million. Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert have been embroiled in an increasingly public fight over it, with Winklevoss even calling on DCG’s board to remove Silbert as CEO of the company in an open letter.
Tyler Winklevoss, co-founder of Gemini responded to the SEC’s Twitter filing, saying the regulator’s behavior was “totally counterproductive” and that it was “optimizing for political points instead of helping (Gemini) advance the cause of 340,000 users of Earn and other creditors”.
Representative Tom Emmer (R-MN) also criticized the SEC’s approach: “Gary Gensler is once again behind the game, not “protecting” anyone. It is abundantly clear that his policy strategy of “regulation by enforcement” is hurting ordinary Americans. »
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other cryptocurrencies.
