The chief executive of Gemini is calling the U.S. Securities and Exchange Commission’s (SEC) actions against the crypto exchange “counterproductive.”
In response to the SEC recently charging Gemini with selling unregistered securities through its Earn program, Gemini CEO Tyler Winklevoss says that the SEC’s actions are disappointing and do nothing to aid in the recovery of Earn users’ assets.
“It’s disappointing that the SEC 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.”
Gemini’s Earn program, which was created in collaboration with crypto lender Genesis, allowed customers to loan out their digital assets and earn interest on them.
However, in November 2022, Genesis faced a liquidity crisis due to the collapse of FTX and was unable to pay out Earn users, prompting Gemini to shut down customer withdrawals. Previously, it was reported that Genesis owes about $900 million to Earn customers.
According to Winklevoss, Gemini was fully cooperating with state and federal regulators. He says the SEC came knocking only after Genesis was unable to pay out Earn program users.
“As a matter of background, the Earn program was regulated by the New York Department of Financial Services 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.”
SEC Chair Gary Gensler says in a press release that he believes Gemini was attempting to find a way around regulatory requirements.
“We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors.”
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