Benzinga - The Securities and Exchange Commission (SEC) announced on Thursday it charged Genesis Global Capital and Gemini Trust Company “for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program.”
What Happened: The SEC stated Gemini and Genesis raised billions of dollars through hundreds of thousands of investors.
In the statement, SEC Chair Gary Gensler said, “We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors. 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.”
The SEC added that other investigations are ongoing into entities and people related to the alleged misconduct.
The SEC’s complaint alleged the Gemini Earn program constituted an offer and sale of securities under applicable law and should have been registered with the Commission.
See Also: Crypto Analyst Shuts Down Rumors, Says Gemini 'Losers', Not 'Shady' Dealers
The complaint was filed in the U.S. District Court for the Southern District of New York. It charged Genesis and Gemini with violations of Sections 5(a) and 5(c) of the Securities Act of 1933.
The SEC investigation was conducted by Jonathan Austin, Ashley Sprague, Deborah Tarasevich and Stacy Bogert. The litigation will be led by Edward Reilly, supervised by James Connor and Olivia Choe.
Why It Matters: Gemini was founded and is led by the brothers Tyler Winklevoss and Cameron Winklevoss. They have made some efforts to distance Gemini from Genesis, which suffered from toxic exposure to FTX (CRYPTO: FTT).
Recently Cameron Winklevoss posted an open letter to Genesis on Twitter accusing the company's leadership and Digital Currency Group CEO Barry Silbert particularly of obfuscating the books in order to cover losses incurred on a loan to Three Arrows Capital (3AC). In the letter, Winklevoss wrote, “there is no path forward as long as Barry Silbert remains CEO of DCG.”
Read Next: Digital Currency Group Details Millions In Outstanding Debts to Genesis, Investment In Exchanges Like FTX
Cover image source: Wikimedia Commons
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