Gemini, Genesis Unregistered Securities?

T

he Securities and Exchange Commission (SEC) has accused Gemini and Genesis of offering unregistered securities to the public. Although this feud between the two entities took off last year when Genesis suspended withdrawals, it appears that these companies have been trading in prohibited activity for quite some time now.

The U.S. Securities and Exchange Commission (SEC) recently filed a lawsuit against crypto exchange Gemini and Genesis Global Capital, accusing them of selling unregistered securities to investors in the United States. In particular, the SEC focused on Gemini Earn – an investment product that was used by hundreds of thousands of American crypto holders who allowed billions worth of digital assets to be loaned out by these companies via a yield-bearing scheme.

The SEC charged Genesis with offering an unregistered security after it closed lending withdrawals in November, leaving approximately 340,000 Gemini Earn customers and $900 million worth of crypto assets stranded. As Digital Currency Group owns both Genesis and CoinDesk, this startling accusation has sent shockwaves through the industry.

The securities regulator said, “Defendants offered and sold the Gemini Earn Agreements through the Gemini Earn Program without registering” and “As a result, investors lacked material information about the Gemini Earn program that would have been relevant to their investment decisions.”

In a highly contested altercation between the Winklevoss Twins of Gemini and Barry Silbert, head of DCG, the tension has amplified with the filing of a lawsuit. As their beloved yield product suffered losses, they accused Silbert's company Genesis Management as fraudulent; while he counters these accusations by deeming them an attempt to garner attention.

Jonathan

An editor at Coincrop

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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.