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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Danny is CoinDesk's Managing Editor for special projects. He owns BTC, ETH and SOL.

Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

The U.S. Securities and Exchange Commission (SEC) alleged crypto exchange Gemini and crypto lender Genesis Global Capital sold unregistered securities in a lawsuit filed late Thursday.

The investment regulator took aim at Gemini Earn, the troubled yield-bearing product that hundreds of thousands of U.S. investors entrusted with their crypto. Gemini generated yield on billions of dollars in crypto by loaning deposits to Genesis, which loaned them out again.

But Genesis’ November closing of lending withdrawals left some 340,000 Gemini Earn customers and about $900 million in crypto in limbo, the SEC said. (Genesis is owned by Digital Currency Group, which also owns CoinDesk). The regulator accused the popular program of being an unregistered security.

“Defendants offered and sold the Gemini Earn Agreements through the Gemini Earn Program without registering” with securities regulators, the complaint said. “As a result, investors lacked material information about the Gemini Earn program that would have been relevant to their investment decisions.”

The lawsuit is the latest twist in a high-stakes CEO battle pitting the Winklevoss twins of Gemini against Barry Silbert, head of DCG. The Winklevoss twins, shaken by the fall of their popular yield product, have accused Silbert of fraud in his company’s management of Genesis; Silbert calls the brothers' accusations a publicity stunt.

The lawsuit is a "manufactured parking ticket," said Gemini co-founder Tyler Winklevoss, responding in a Twitter thread. He noted that his company had been in discussions with the SEC over the Earn product for nearly 17 months and the agency "never raised the prospect of any enforcement action until AFTER Genesis paused withdrawals on November 16th."

UPDATE (Jan. 13, 2023 13:00 UTC): Adds Tyler Winklevoss' comments.




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The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Danny is CoinDesk's Managing Editor for special projects. He owns BTC, ETH and SOL.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Danny is CoinDesk's Managing Editor for special projects. He owns BTC, ETH and SOL.