SEC files charges against Genesis and Gemini – Pot program in regulator’s eyes

One more problem US authorities are monitoring developments for Gemini’s clients those who loaned their cryptocurrency to Genesis and were unable to get their assets back. The SEC went on the offensive, filing lawsuits against both companies.

Earnings program: SEC files complaint against Gemini and Genesis

The SEC announced this in a press release issued on January 12 complained v. Genesis Global Capital and Gemini for selling unregistered securities to retail investors under the Earn program.

The SEC explained in detail the working mechanism of these crypto loans. He recalled that the two parties reached an agreement in December 2020 to allow Gemini’s clients. they give their cryptocurrencies to Genesis. In return, customers were to receive premium interest.

In this scheme, the SEC believes that Gemini played a role intermediary which facilitates transactions and charges a relatively high commission of up to 4.29%.

As for Genesis, the company used cryptocurrencies, at its own discretiongenerating income, this should allow users of the Earning program in particular to pay off this chargeable interest.

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Stopping cash-for-profit withdrawals: A boon for the SEC

SEC Chairman, Gary Gensler, explained this claim. It will be based on “prior actions” as a clear indicator for the market and investors. It is important for the regulator to have cryptocurrency platforms as well as intermediaries to comply with securities laws.

Gary Gensler defended the merits of this complaint against Genesis and Gemini, stressing that this alignment allows for “the best protection for investors” and that it “promotes confidence in the markets.” He insisted that adherence to these rules was not optional, “ is the law “.

The suspension of withdrawals from the Earn program last November after it was proven that Genesis’ cryptocurrency reserves were insufficient to process withdrawals. an argument in favor of From these words of Gary Gensler.

Avoid liability and counterproductive legal action: Winklevoss siblings speak out

Genesis is still unable to find a solution to allow withdrawals to be reopened for Gemini customers using the Win program. These liquidity problems and the attitude of Barry Silbert, the CEO of Genesis, ended. Annoys the Winklevoss brothers.

In an open letter on January 2, Cameron Winklevoss criticized apparently Genesis CEO Barry Silbertwho accuses – in the main lines – evading the obligations of Earn users regarding these assets after irresponsible use of these funds.

While friction between the two partners complicates the search for a solution, the SEC adds another layer. This time, it was Tyler Winklevoss who stepped up to the plate, criticizing the SEC’s behavior. is completely counterproductive “.

The Gemini co-founder said he was disappointed by the regulator’s move, as Gemini and creditors will try to recover funds from Earn users. Tyler Winklevoss lamented that the agency disclosed the complaint to the press before announcing its cryptocurrency, while discussions about the crypto loan program would be held with the SEC. for 17 months.

Genesis owes creditors at least $1.8 billion. The SEC believes it has done its job by filing suit against the company and the Twins. But will this legal action allow Earn users to recover their assets?

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