The Securities and Exchange Commission (SEC) has leveled formal and serious charges against Genesis and Gemini for illegally carrying out the sale of unregistered securities. For the uninitiated, Genesis is a digital asset financial services firm, while Geminin is a centralized cryptocurrency exchange.
In the case of Gemini, the SEC has levied specific charges in connection with its Earn product, which appears to have promised all of its users a substantial yield on their individually deposited crypto assets. On the other hand, Gemini had placed all those assets with Genesis. The matter pertains to the fact that Genesis happens to be troubled by an immense amount of financial-based problems following the complete collapse of FTX, which presumably left the entity in a very vulnerable position.
According to the SEC chair, Gary Gensler, the formal charges that have been duly put forward will have a cascading effect on the actions taken previously in order to send out a relevant message to the concerned marketplace, along with all of the prospective investors, that it happens to be the moral and ethical duty of all such crypto lending platforms, together with all of the other intermediaries, to abide by the security laws that have been duly enacted.
In this very regard, however, there are a lot of differences of opinion. For one, there are those who firmly believe that it would have made more sense if the SEC had taken note of all of this earlier.
Cameron Winklevoss, the co-founder of Gemini, and his brother Tyler appear to have had a series of major confrontations with Barry Silbert, the CEO of Digital Currency Group (DCG), the parent company of Genesis. This appears to pertain to the status of the frozen Earn assets.
On the other side, Tyler Winklevoss, co-founder of Gemini, appeared to be entirely opposed to the approach chosen by the SEC. In his opinion, his company and the SEC had been in constant contact on all Earn-related issues, and it was only when Genesis withheld withdrawals that the SEC allegedly acted. Out of all of this, it happens to be the users of Earn who are seemingly left out to dry.