SEC takes action against Gemini & Genisis over unregistered securities offerings

The US Securities regulatory body filed charges against Gemini Crypto exchange & Crypto lender Genesis over unregistered securities offerings.

The United States Securities and Exchange Commission (SEC) is a spot cash market regulatory body, which also regulates the Crypto sector. The US SEC agency is known as a strict financial regulatory body, from the point of view of the Crypto sector. In the present time, SEC is fighting against Ripple with its full potential over the nature of the XRP token, for 2 years. 

Recently the SEC agency filed a charge against Gemini Crypto exchange as well collapsed Crypto lender Genesis. Through the filing, regulatory agency argued that Gemini exchange was providing lending services to its customers in partnership with Genesis with the promise to give up to 8% yield. 

The SEC agency argued that the services provided by these two parties were against the Securities Act because that was unregistered securities offerings. The securities regulatory body also claimed that Gemini reported about this service wrongly. The agency noted that both of these two entities were taking Billions of dollars from their customers through unregistered securities offerings.

Gemini vs Genesis

To this date, Genesis holds $900 million worth of crypto assets from 340k Gemini customers. And all these funds are under freezed state in the custody of Genesis & experts believe that Genesis may potentially file for bankruptcy. Before bankruptcy, Gemini wants its all funds back from Genesis. 

The SEC agency noted that such wrong information about the business model resulted in a very bad situation for Gemini customers.

“The U.S. retail investors who participated in the Gemini Earn program have suffered significant harm,” claims SEC. Approximately 340,000 investors lost funds due to the freeze in withdrawals.”

Gemini co-founder Cameron Winklevoss responded to this enforcement action of the SEC agency and said that the exchange is working hard to recover the funds, to save the investors from any kind of financial loss.

Gemini co-founder also criticized SEC enforcement action.

2/ As a matter of background, the Earn program was regulated by the @NYDFS and we’ve been in discussions with the SEC about the Earn program for more than 17 months. They never raised the prospect of any enforcement action until AFTER Genesis paused withdrawals on November 16th.

— Tyler Winklevoss (@tyler) January 12, 2023

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