Winklevoss firm charged in US over crypto sales
Cryptocurrency firms Gemini and Genesis have been charged by US regulators with illegally selling crypto assets to hundreds of thousands of investors.
The companies are accused of breaking the law by offering and selling the products through their joint programme, Gemini Earn, which launched in 2021.
The Securities and Exchange Commission (SEC) is in charge of the case.
Gemini was co-founded by twins Tyler and Cameron Winklevoss - known for their legal dispute with Facebook.
Tyler called the complaint "disappointing", and said his company looks forward to defending itself.
Genesis, which is owned by the crypto conglomerate Digital Currency Group, has so far not commented on the charges.
"Doing so best protects investors. It promotes trust in markets. It's not optional. It's the law."
Over the past week, a public feud has erupted between the Winklevoss brothers and Barry Silbert, the chief executive of Digital Currency Group, the parent company of Genesis.
It related to Gemini Earn, which was sold to investors as an opportunity to make up to 7.4% in interest on their crypto currency holdings.
When FTX filed for bankruptcy last November, Genesis halted customer withdrawals saying it lacked sufficient liquid assets because of the volatility of the market.
This had a knock-on impact for 340,000 customers using Gemini Earn, leaving them unable to take out their crypto assets.
Cameron Winklevoss claims Digital Currency Group owes $900m (£737m) to clients of his firm Gemini as a result and accused Mr Silbert's group of "defrauding" his customers.
A Digital Currency Group spokesperson rejected the accusations, saying they were "malicious, false and defamatory attacks" and describing them as a "desperate and unconstructive publicity stunt".
Through its complaint, filed in the US District Court for the Southern District of New York, it is seeking to hit both companies with civil penalties and make them repay "ill-gotten gains".
Earlier this week, Mr Gensler described crypto as the "Wild West".
These latest charges come as US officials crack down on the sector after the uproar caused by the bankruptcy of FTX and Alameda Research.
Their founder, Sam Bankman-Fried, is accused of fraud after diverting funds deposited by millions of customers on his FTX platform, and transferring them without authorisation to Alameda, a hedge fund.
Mr Bankman-Fried denies the charges.
The Securities and Exchange Commission (SEC) is in charge of the case.
Gemini was co-founded by twins Tyler and Cameron Winklevoss - known for their legal dispute with Facebook.
Tyler called the complaint "disappointing", and said his company looks forward to defending itself.
Genesis, which is owned by the crypto conglomerate Digital Currency Group, has so far not commented on the charges.
Public feud
Gary Gensler, who chairs the SEC, said: "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."Doing so best protects investors. It promotes trust in markets. It's not optional. It's the law."
Over the past week, a public feud has erupted between the Winklevoss brothers and Barry Silbert, the chief executive of Digital Currency Group, the parent company of Genesis.
It related to Gemini Earn, which was sold to investors as an opportunity to make up to 7.4% in interest on their crypto currency holdings.
When FTX filed for bankruptcy last November, Genesis halted customer withdrawals saying it lacked sufficient liquid assets because of the volatility of the market.
This had a knock-on impact for 340,000 customers using Gemini Earn, leaving them unable to take out their crypto assets.
Cameron Winklevoss claims Digital Currency Group owes $900m (£737m) to clients of his firm Gemini as a result and accused Mr Silbert's group of "defrauding" his customers.
A Digital Currency Group spokesperson rejected the accusations, saying they were "malicious, false and defamatory attacks" and describing them as a "desperate and unconstructive publicity stunt".
'Wild West'
The SEC regulates financial markets in the US and has enforcement powers to launch civil actions against companies it believes has breached laws.Through its complaint, filed in the US District Court for the Southern District of New York, it is seeking to hit both companies with civil penalties and make them repay "ill-gotten gains".
Earlier this week, Mr Gensler described crypto as the "Wild West".
These latest charges come as US officials crack down on the sector after the uproar caused by the bankruptcy of FTX and Alameda Research.
Their founder, Sam Bankman-Fried, is accused of fraud after diverting funds deposited by millions of customers on his FTX platform, and transferring them without authorisation to Alameda, a hedge fund.
Mr Bankman-Fried denies the charges.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
