The United States Securities and Exchange Commission has charged Gemini for the unregistered offering and sale of securities. The charge has to do with the Gemini Earn program.
The crypto market is experiencing another major legal case unfolds. The United States Securities and Exchange Commission has charged Gemini for the unregistered offering and sale of crypto asset securities through Gemini Earn.
The press release, issued on Jan. 12, said that the two companies raised “raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors.” They are also investigating other securities law violations and other entities and persons related to the matter. SEC Chair Gary Gensler tweeted about the case on Jan. 13, setting off much discussion about the charge in the crypto community.
The Gemini Earn program, which has been at the center of a heated debate between Cameron Winklevoss and DCG CEO Barry Silbert, launched in February 2021. This revenue program allowed retail investors to earn interest on their assets.
The SEC claims that the program’s offerings should have been registered with the Commission. 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.”
Officials also referred to the collapse of other crypto lending programs. It noted that these programs must follow laws in order to operate.
Gemini Co-Founder Responds
Tyler Winklevoss has responded to the charge, saying on Twitter that it was disappointing. He noted that the NYDFS regulated the program and that Gemini was discussing it with the SEC for 17 months. He called it a “manufactured parking ticket.”
Gemini is an exchange that has been very focused on regulation. The exchange is registered in New York, which has been very strict regarding allowing cryptocurrencies to operate.
SEC Not Dialing Down Crypto Scrutiny
The SEC has focused intensely on the crypto market in the past 12 months, and Gensler clarified the agency’s intention. The SEC Chair said that non-compliant crypto firms would face a tough 2023.
Some of these cases have irked the crypto community, such as the one against Ripple. It has also been targeting crypto auditors, as the authority doubts the legitimacy of the audits.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.