TechFlow news — The U.S. Securities and Exchange Commission (SEC) has charged Genesis Global Capital and Gemini Trust Company with offering and selling unregistered securities to retail investors through a crypto lending program.
The SEC stated that Genesis entered into an agreement with Gemini in December 2020 and began offering the Gemini Earn program to retail investors in February 2021, allowing Gemini customers to earn interest by lending their cryptocurrency to Genesis. Gemini also deducted referral fees from the returns paid by Genesis to Gemini Earn investors, at times as high as 4.29%. Genesis had full discretion over how to use investors' crypto assets to generate revenue. An SEC official said that Genesis and Gemini, as partners, participated in the unregistered issuance and sale of securities, and both companies are responsible.
Earlier, Gemini co-founder Tyler Winklevoss responded on social media, expressing disappointment with the SEC's action, saying it is counterproductive while Gemini and other creditors are working hard to recover funds. He added that the SEC announced the lawsuit without prior notice to them.
In addition, DCG declined to comment on the matter.Original link
