Co-founder of crypto exchange Gemini, Tyler Winkelevoss spoke about the charges against Genesis Global Capital and Gemini by the United States and Securities Exchange (SEC). He called out the allegations against the entities as lame and “manufactured.”
On Jan 12, SEC charged the crypto lender Genesis Global Capital and exchange firm Gemini for offering unregistered securities using the “Earn” program of the crypto exchange.
Winklevoss picked up the same and took to Twitter stating the charges against the Earn program were brought by the regulator as wrong and saying it as politically optimized points.
While referring to the discussion of crypto exchange with the regulator regarding the program for more than 17 months the recent action proved to be “counterproductive” to the efforts.
He added that the regulator did not anticipate “any enforcement action” but came up with one as Genesis halted its withdrawal operations in November last year.
Launched in February 2021 and officially running through January 8 was Gemini’s Earn offering. Users of Gemini can earn interest by lending their cryptocurrency to the market-making company Genesis, a Digital Currency Group (DCG) affiliate.
To make the yield-bearing cryptocurrency product available to Gemini’s consumers, Genesis, a division of the crypto conglomerate Digital Currency Group (DCG), signed a contract in December 2020. Then, in February 2021, this was launched.
Customers of Gemini were permitted to lend their cryptocurrency to Genesis on the condition that Genesis would reimburse the loan with interest. Genesis was in complete charge of how it would generate a yield to pay back Gemini’s creditors.
Genesis disclosed it had about $175 million stranded in the now-defunct FTX exchange at the beginning of November. DCG tried to strengthen the company’s balance sheet by sending it $140 million, but by Nov. 16 Genesis had stopped withdrawals, citing FTX’s insolvency.
According to open letters written by Cameron Winklevoss, co-founder of Gemini, Genesis owes 340,000 Gemini Earn members $900 million.
Gemini will defend itself against the allegations of unregistered security and will “make sure this doesn’t distract us from the vital recovery work we are doing,” according to Tyler Winklevoss.
Source: https://www.thecoinrepublic.com/2023/01/13/winklevoss-calls-out-sec-for-recent-actions-against-gemini/