It’s been just revealed that the SEC charged two important crypto firms with selling unregistered securities. Check out the latest reports below.
SEC charges two crypto firms
The Securities and Exchange Commission on Thursday charged crypto firms Genesis and Gemini with allegedly selling unregistered securities related to a high-yield product offered to depositors.
As CNBC notes, Gemini, a crypto exchange, and Genesis, a crypto lender, teamed up in February 2021 on a Gemini product called Earn, which touted yields of up to 8% for customers.
The SEC said that Genesis loaned Gemini users’ crypto and sent a portion of the profits back to Gemini, which then deducted an agent fee, sometimes over 4%, and returned the remaining profit to its users.
It’s also worth noting the fact that Genesis should have registered that product as a securities offering, SEC officials said in a complaint filed in Manhattan federal court.
“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,” SEC chair Gary Gensler said in a statement.
According to the same official reports, it seems that Gemini’s Earn program, supported by Genesis’ lending activities, met the SEC’s definition by including both an investment contract and a note, SEC officials said. Those two features are part of how the SEC assesses whether an offering is a security.
1/ It’s disappointing that the @SECGov chose to file an action today as @Gemini and other creditors are working hard together to recover funds. This action does nothing to further our efforts and help Earn users get their assets back. Their behavior is totally counterproductive.
— Tyler Winklevoss (@tyler) January 12, 2023
Here are more relevant tweets:
3/ Despite these ongoing conversations, the SEC chose to announce their lawsuit to the press before notifying us. Super lame. It’s unfortunate that they’re optimizing for political points instead of helping us advance the cause of 340,000 Earn users and other creditors.
— Tyler Winklevoss (@tyler) January 12, 2023
Check out the original article in order to learn more details about all this.
