Expert Opinion: Genesis Global and Gemini Trust are Facing SEC Charges
The Securities and Exchange Commission has charged cryptocurrency businesses Genesis Global Capital and Gemini Trust with offering unregistered securities to retail investors through a scheme that offered deposit interest rates of up to 8%.
Genesis, which is part of Barry Silbert’s Digital Currency Group, and Gemini, which is controlled by Tyler and Cameron Winklevoss, avoided disclosure rules intended to safeguard investors, according to SEC Chair Gary Gensler. And he published his opinion on Twitter that you can see below.
The program, Gemini Earn, allowed people to transfer their crypto assets to Genesis in exchange for a bet. Gemini, as an agent, deducted a 4.29% commission from the profits that Genesis paid to Gemini Earn investors.
Genesis suspended withdrawals from Gemini Earn in November after the collapse of the FTX cryptocurrency exchange. At the time, Genesis had $900 million in assets from 340,000 investors, the SEC said. Gemini ended the Earn program in December, but investors were still unable to get their money, the agency reported.
This suspension triggered a spat between Silbert and Genesis and the Winklevoss twins, who have been unsuccessful in obtaining Earn customer assets. This week, Cameron Winkelvoss called on DCG’s board to fire Silbert.
Silbert said in a letter to shareholders this week that the last year had been the most painful of his life. A DCG spokesman declined to comment on the SEC matter.
Tyler Winklevoss tweeted on Thursday that the SEC’s action was “super lame” and came as a surprise to them.
According to him, the program was regulated by the New York Department of Financial Services, and the SEC never mentioned the potential of an enforcement action until Genesis halted withdrawals.
“The SEC chose to announce their lawsuit to the press before notifying us,” Winklevoss said in his tweet string. “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.”
Winklevoss stated that he and his staff are looking forward to defending themselves against these fabricated claims.
Expert Opinion :
“Cameron & Tyler Winklevoss, may have had the best of intentions towards the stranded depositors in Genesis, but it appears instead they have sealed their fate. While Barry Silbert, the founder of Genesis parent Digital Currency Group Inc., was out trying to sell off his empire to raise cash to pay off the Genesis depositors, the Winklevoss twins were out making trouble. It appears they stuck the Comstock Lode. Not only have they brought the full weight of the Justice Department and the S.E.C down on Silbert, but they have gotten themselves snared in the process. The bottom line is that Barry Silbert is unlikely to draw investors into a company in as much trouble as he is in. The Winklevoss wanted to strong arm Silbert into paying up but, instead, they have introduced a pox that will likely bring Genesis investors to their knees. ”
Bill
Expert of Yahoo Finance
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