Categories: Entertainment

SEC Files “Totally Counterproductive” Charges Against Gemini and Genesis

The U.S. regulator has decided to complicate matters further for the two belligerent crypto companies.

Key Takeaways

  • The SEC is accusing 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 “totally counterproductive.”

The SEC is accusing both Gemini and Genesis of offering unregistered securities to retail investors.

“Once Again Late to the Game”

The Genesis situation keeps getting worse.

Yesterday the Securities and Exchange Commission filed charges against crypto lending company 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, bypassing disclosure requirements designed to protect investors,” stated SEC Chair Gary Gensler. “Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws.”

Genesis is a Digital Currency Group subsidiary. Genesis and Gemini set up the Earn program in December 2020 to offer Gemini customers the possibility of loaning their crypto assets to Genesis and earn interest on them. However, Genesis froze its redemption services in the immediate aftermath of FTX’s collapse; the company currently owes $900 million to Gemini clients. Gemini co-founder Cameron Winklevoss and DCG CEO Barry Silbert have been involved in an increasingly public fight over the matter, with Winklevoss even calling for the DCG board to remove Silbert as company CEO in an open letter.

Gemini co-founder Tyler Winklevoss responded to the SEC’s filing on Twitter, stating that 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 Earn users and other creditors.”

Rep. Tom Emmer (R-MN) also criticized the SEC’s approach: “Gary Gensler is once again late to the game, ‘protecting’ no one. Quite clear that his political ‘regulation through enforcement’ strategy hurts everyday Americans.”

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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Greg Aftayev

Greg Aftayev is a Journalist at Flaunt Weekly Covering Tech News.

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