The US Securities and Exchange Commission (SEC) has filed a complaint against cryptocurrency lender Genesis Global Capital and exchange Gemini Trust.
On Jan. 12, 2023, U.S. Securities and Exchange Commission (SEC) published a press release, in which they detail the reasons behind such actions.
Genesis and Gemini are accused of selling unregistered securities to retail investors under the Earn lending programme.
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It is being alleged that the two companies sold billions of dollars worth of crypto-assets to "hundreds of thousands of investors" through the Gemini Earn programme, and promised depositors high-interest returns.
According to the press release, the companies ‘violated the Securities Act 1933’.
In the press release, SEC chair Gary Gensler is quoted as saying:
We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors
As a response to the developing situation, Gemini co-founder Tyler Winklevoss commented on the SEC's statement:
He considers the commission's action to be 'completely counterproductive'. Future litigation is not conducive to the company's efforts to recover crypto assets from customers.
The situation is getting more and more tense everyday, as testerday, Gemini officially shut down the Earn programme.
This came amid payment delays and a Twitter spat between Barry Silbert (founder of DCG) and Cameron Winklevoss (Gemini co-founder), who wrote an open letter to Silbert.
Genesis, on the other hand, has also been going trough rough times, as it was recently announced that the company laid off 30% of its workforce.
