The Winklevoss Twins, Genesis Target of SEC Crypto Crackdown

[ad_1]

NEW YORK (AP) The Securities and Exchange Commission has sued two leading companies in the crypto community, alleging that Genesis Global Capital and crypto exchange Gemini were selling unregistered securities through a popular program said to pay high interest on crypto deposits. .

Thursday’s SEC lawsuit against Gemini, which is led by Tyler and Cameron Winklevoss who are sometimes best known as the disputed creators of Facebook, and Genesis is part of a broader crackdown on cryptocurrency by multiple US government agencies after crypto prices plummeted last year, primarily exposing retail investors to billions of dollars in losses.

Tyler Winklevoss called the lawsuit a parking ticket and pledged to defend the company.

The lawsuit involves a program known as Gemini Earn, which allowed individuals to deposit their cryptocurrencies in turn for a high interest rate of up to 4.29%. Gemini and Genesis would then lend these cryptocurrencies to other investors.

But the crash in crypto prices last year put many crypto lenders out of business, out of business, or caused them to drastically scale back their businesses. Voyager Digital, Celsius and FTX, whose founder was criminally charged last month, were all platforms that carried out various forms of deposit and lending transactions.

The SEC alleges that Gemini Earn was in fact an offer and sale of securities and that the program should have been registered with US authorities. Additionally, as crypto prices crashed, Genesis had to freeze withdrawals from its Gemini Earn program and customers now have around $900 million, according to the SEC.

The SEC, under Chairman Gary Gensler, has argued for some time that it has the legal authority to regulate crypto, and it has used its prosecutorial and enforcement powers extensively to do so.

Today’s charges build on prior actions to make it clear to the market and the investing public that crypto lending platforms and other intermediaries must comply with our time-tested securities laws,” Gensler said in a statement. a statement.

The story continues

The cryptocurrency industry, its lobbyists, and its friends in Congress have strongly pushed back against the SEC and widely lobbied for the smaller Commodity Futures Trading Commission to oversee crypto.

Tyler Winklevoss said on Twitter that the Gemini Earn program is regulated by the New York Department of Financial Services and that they had conversations with the SEC about Earn for over a year and a half. He said the SEC had no problems with the Earn program until withdrawals were suspended in November following the bankruptcy of FTX.

We look forward to defending ourselves against this fabricated parking ticket, Winklevoss said. And we’ll make sure that doesn’t distract us from the important recovery work we do.

[ad_2]