The U.S. Securities and Exchange Commission (SEC) on Thursday charged cryptocurrency lender Genesis Global Capital and crypto exchange Gemini Trust with offering and selling unregistered securities to retail investors through a lending program.
- The SEC said in a Thursday statement that Genesis, owned by Digital Currency Group (DCG), and the Gemini exchange had sold crypto assets worth billions of dollars to “hundreds of thousands of investors” through the Gemini Earn program that promised depositors high interest returns.
- “We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors,” SEC Chair Gary Gensler said in the statement.
- Gensler added: “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. Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law.”
- Gemini’s Earn Program officially shut down on Tuesday amid a Twitter spat between Barry Silbert, founder of DCG, and Cameron Winklevoss, co-founder of Gemini. Winklevoss alleges DCG’s Genesis unit owes Gemini users US$900 million.
- Tyler Winklevoss, the other Gemini co-founder, tweeted on Friday that the SEC’s action was “totally counterproductive” and “does nothing to further our efforts and help Earn users get their assets back.”
See related article: US prosecutors, SEC probes Digital Currency Group: report