SEC Charges Genesis And Crypto Exchange Gemini for Unregistered Offer & Sale of Crypto Asset Securities
The Securities and Exchange Commission (SEC) has filed charges against crypto companies Gemini and Genesis for allegedly selling unregistered securities through the “Earn” program offered by Gemini.
Claims Made by SEC
The SEC claims that the program, which was active from February 2021 to January 2022, allowed the companies to obtain billions of dollars from hundreds of thousands of investors without proper registration. The program, which was a partnership with Digital Currency Group subsidiary Genesis, allowed Gemini customers to earn yield by lending their cryptocurrency to the market-making firm. The SEC claims that the companies misrepresented their business model by advertising high returns without proper registration as a lending partnership with the appropriate authorities. According to statements from the co-founder of Gemini Earn, Cameron Winklevoss, Genesis owes $900 million to 340,000 users of the program.
Gary Gensler, Chairperson, U.S. Securities and Exchange Commission took to his twitter to explain why the two parties have been charged.
We @SECGov charged Genesis & Gemini for the unregistered offer & sale of crypto asset securities through Gemini Earn.
Crypto intermediaries need to comply with our securities laws. This protects investors. It promotes trust in markets. It’s not optional. It’s the law.
— Gary Gensler (@GaryGensler) January 12, 2023
Gemini Co-founder Responds
Cameron Winklevoss, in response to the Securities and Exchange Commission (SEC) charges against the crypto exchange, defended the firm by stating that the exchange is making efforts to recover investor’s funds. He also referred to the SEC’s actions as “super lame” and “counterproductive.”
He expressed his disappointment in a detailed thread on his twitter handle.
“As a matter of background, the Earn program was regulated by the @NYDFS and we’ve been in discussions with the SEC about the Earn program for more than 17 months. They never raised the prospect of any enforcement action until AFTER Genesis paused withdrawals on November 16th” said Tyler Winklevoss.”
1/ It’s disappointing that the @SECGov chose to file an action today as @Gemini and other creditors are working hard together to recover funds. This action does nothing to further our efforts and help Earn users get their assets back. Their behavior is totally counterproductive.
— Tyler Winklevoss (@tyler) January 12, 2023
The SEC’s charges against Gemini and Genesis indicate that the commission is taking steps to prevent similar frauds from occurring again, such as the one that happened with FTX. The commission is also investigating if any other parties or companies are involved in the alleged misconduct and if any other securities laws were violated.
Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity’s role is to inform the cryptocurrency and blockchain community about what’s going on in this space. Please do your own due diligence before making any investment. Blockmanity won’t be responsible for any loss of funds.
Get the latest news on Blockchain only on Blockmanity.com. Subscribe to us on Google news and do follow us on Twitter @Blockmanity
Did you like the news you just read? Please leave a feedback to help us serve you better
#SEC #Charges #Genesis #Crypto #Exchange #Gemini #Unregistered #Offer #Sale #Crypto #Asset #Securities