US financial watchdog the SEC (Securities and Exchange Commission) has filed charges against crypto lending firms Gemini and Genesis.

On 12 January, SEC sued the firms over their crypto lending product, Earn, for allegedly breaching investor protection laws.

## The Gemini SEC lawsuit

The [Gemini](https://www.gemini.com/) SEC civil lawsuit has been filed in the Federal Court of Manhattan. As per the SEC, both companies did not register their product before offering them to individual investors. The regulator claims that the Earn program has been used to sell unregistered securities. 

The crypto lending program allowed the exchange’s customers to lend their assets to [Genesis](https://genesistrading.com/) to earn up to 8% interest. The crypto exchange also profited by charging a fee of around 4.29% through this program.

Both these partner firms are under scrutiny after Genesis paused withdrawals unexpectedly in November. Interestingly, it happened right after the FTX exchange crashed. As per the SEC, at that time, the cryptocurrency lending program had more than [$900 million worth of crypto assets](/news/article/genesis-brokers-owes-gemini) of their customers. With this lawsuit, the commission is looking to recover illegal profits and fines for the offence. 

## Tyler Winklevoss's statement on Gemini SEC charges

Soon after the Gemini SEC lawsuit was filed, Gemini’s co-founder, [Tyler Winklevoss](/news/article/tyler-winklevoss-twitter), issued a statement via [Twitter](https://twitter.com/tyler/status/1613674691507679233). He said, "We look forward to defending ourselves against this manufactured parking ticket...".

He also showed his resolve to continue work to recover customers' assets.

On the other hand, Genesis Global Capital is yet to comment on the issue. 

Since the pause of withdrawals, the lending partner has been seeking ways to recover. However, the Wall Street Journal recently reported that the firm might have to file for [Chapter 11 bankruptcy](https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics). The firm has already laid off more than 30% of its workforce in the last week.

Gemini and Genesis have ties with the [fallen exchange](/news/article/gemini-crypto-exchange-falls-prey), FTX, and have been in losses since its decline.



gemini and Genesis logos over red image of US SEC building

Genesis and Gemini: SEC Takes Action

Barry Silbert, the CEO of Digital Currency Group (DCG), has denied employing “bad faith stall tactics” in a duel pitting DCG against the Gemini Exchange’s Cameron Winklevoss, whose firm is trying to retrieve [$900 million](/news/article/genesis-brokers-owes-gemini) of deposits their clients placed with Genesis.

## Clients unable to access their funds

DCG is currently in the crosshairs of the rest of the crypto industry, and [rumors](https://www.bloomberg.com/news/articles/2023-01-06/barry-silbert-s-list-of-crypto-woes-starts-with-genesis-bankruptcy-angst?sref=ZTdRrSmf) about a looming Genesis [bankruptcy](https://www.reuters.com/technology/us-crypto-broker-genesis-says-it-is-working-avoid-bankruptcy-filing-2022-11-30/) and federal investigations are fueling the allegations. 

The contest with Winklevoss gravitates around allegations regarding a loan Barry Silbert extended to Genesis to the defunct crypto hedge fund Three Arrows Capital (3AC): 3AC owed Genesis [more than $1 billion](https://www.coindesk.com/business/2022/07/18/genesis-global-issued-236b-in-undercollateralized-loans-to-three-arrows-capital/) when it tanked last year. As the two crypto entrepreneurs continue bickering, Gemini’s clients have been unable to access their funds for at least six weeks. 

Genesis and Gemini partnered about two years ago. They launched a high-yield crypto product called Earn, through Gemini, that offered up to 8% ROI on customer deposits. Gemini exchange lent funds from Earn to Genesis, which the latter placed on numerous trading platforms and borrowers. The relationship flourished throughout 2020 and 2021 as the crypto market thrived, but matters went haywire in 2022 when the crypto market dithered, causing the Earn model to fall apart. 

Gemini halted all withdrawals last November at the height of the FTX crisis to the chagrin of more than 340,000 of its retail clients, some of whom are seeking legal redress.   

## Barry Silbert is the public face of DCG

Barry Silbert, the public face of DCG, has never shied away from using Twitter or interviews to opine on the crypto market. The career investment banker is among the pioneer investors in blockchain firms around 2013 and established DCG in 2015; the firm has so far invested in more than 200 crypto startups. 

According to [Forbes magazine](https://www.forbes.com/profile/barry-silbert/?sh=530f2a452950), the Emory University’s Goizueta Business School alumnus had a net worth of $3.2 billion and was the eighth-richest crypto investor in April 2022. 

Apart from Genesis, DCG's lending arm, the $10 billion company has a stake in digital asset manager Grayscale besides owning crypto mining firm Foundry Services, trade publication Coindesk, digital asset platform Luno global, and crypto index provider TradeBlock. Apart from its association with the defunct 3AC, Genesis joins the list of firms suffering from FTX [contagion](/news/article/gemini-crypto-exchange-falls-prey) as its derivative business is said to have had over $175 million locked in an FTX trading account.


red image of stock market with Cameron Winklevoss and Barry Silbert

Barry Silbert Rebuts ‘Bad Faith’ Claims

Cameron Winklevoss, co-founder of crypto exchange Gemini Trust Co with his twin brother, accused CEO of Digital Currency Group Barry Silbert of "bad faith stall tactics" on Monday and demanded that he commit to settling $900 million in disputed client assets by 8 January.

## Winklevoss says Genesis owes more than $900 million

In partnership with DCG's crypto company [Genesis](/news/article/genesis-brokers-owes-gemini), Gemini offers a crypto financing product called Earn. Following the bankruptcy of major cryptocurrency exchange [FTX](/news/article/is-crypto-dead) in November, [they froze customer withdrawals](https://www.reuters.com/technology/crypto-broker-genesis-suspend-redemptions-new-loan-originations-tweet-2022-11-16/). 

Winklevoss stated that Genesis owed about $900 million to around 340,000 Earn investors and that he had been attempting to achieve a "consensual resolution" with Silbert for the previous six weeks. 

"Over the past six weeks, we have done all we can to engage with you in good faith and collaboratively in an attempt to seek a consensual settlement for you to return the $900 million that you owe while also assisting you in the preservation of your business," Winklevoss said in his letter. "However, it is now evident that you have been using deceptive delay tactics. 

## Winkelvoss's open letter to Silbert and his response

"However, it is now evident that you have been participating in bad faith delay tactics," Winklevoss stated in a Twitter https://twitter.com/cameron/status/1609913051427524608?s=20&t=belP_IbOFb4yt9f9xIG4Aw to Silbert. "We are asking you to commit to collaborating to fix this problem by 8 January, 2023," he continued.

The letter should have specified what would happen if an agreement with Silbert was reached by 8 January. Winklevoss responded that DCG owed Genesis $1.675 billion, which Genesis owed to Earn users and other creditors, adding that "this disaster is all of your inventions".

In a [tweet](https://twitter.com/BarrySilbert/status/1609926715454771200), Silbert stated that DCG had not borrowed $1.675 billion from Genesis. In his opinion, DCG has never missed an interest payment to Genesis. 

It has no loans outstanding, adding that on 29 December, DCG delivered a proposal to Genesis and Winklevoss' counsel and has yet to get a response.

Genesis said in a letter to clients on [7 December](https://www.reuters.com/technology/crypto-lender-genesis-tells-clients-it-is-working-preserve-their-assets-2022-12-07/) that it was trying to safeguard client assets and increase liquidity, but that it would take weeks rather than days to develop a plan.


red image oc cameron winklevoss with genesis logo

Winklevoss Claims Genesis Owes Earn Investors

If you only know one thing about Cameron Winklevoss, it might be that he was part of the team that created Facebook.
You may not know that his story didn't end when Facebook became a household name.

Cameron has continued to be a successful entrepreneur, and he has even ventured into the world of cryptocurrency. Here, we take a closer look at Cameron Winklevoss and his impressive career.

## Who are the Winklevoss twins, and what do they do?

Cameron and Tyler Winklevoss are identical twins who are perhaps best known for their role in the early days of Facebook.

The two were born in 1981 and raised in Greenwich, Connecticut. They attended Harvard University, where they studied economics. While at Harvard, they met Mark Zuckerberg, the founder of Facebook.

Cameron and Tyler eventually sued Zuckerberg, claiming that he had stolen their idea for a social networking site. An out-of-court settlement saw the twins receiving $65 million in cash and stock.

The twins have turned their attention to investing in Bitcoin and other cryptocurrencies in recent years. They are estimated to be worth billions of dollars after making wise investments in this fledgling industry.

What is the backstory to their legal battle with Facebook founder Mark Zuckerberg over the origins of Facebook?
Cameron and his brother, Tyler, first came up with the idea for Facebook while attending Harvard University. They asked Mark Zuckerberg, a fellow student, to help them develop the site.

However, after the site was running, Cameron and Tyler accused Zuckerberg of stealing their idea and taking credit for himself.

Despite the settlement mentioned earlier, Cameron asserts that he was wronged by Zuckerberg and that Facebook should have been his.

How did they eventually settle with Zuckerberg, and what did they receive in return?

After a lengthy legal battle, the two parties settled on a deal which included a seat on Facebook's board of directors.

The settlement also included a provision that granted them 1.2% of Facebook's shares. Today, Cameron and Tyler's stake in Facebook is worth billions of dollars.
What investments have the Winklevoss twins made since then, and how have they done so far?

The twins have been busy investing their fortune. In 2013, they invested $11 million in bitcoin, purchasing 1% of all outstanding bitcoins at the time. It proved a good investment, as the price of [Bitcoin](/news/category/bitcoin-news) has surged in recent years.

## What is their opinion on Bitcoin and other cryptocurrencies?

Cameron Winklevoss, one of the early investors in Bitcoin, believes that the cryptocurrency is still in its early stages and has much growth potential.

Cameron and his brother started investing in Bitcoin in 2012, when each Bitcoin was worth around $12. At that time, they bought about 1% of all the Bitcoins in circulation.

He believes that Bitcoin still has room to grow, citing its limited supply and increasing demand as two significant factors.

Cameron also points to the many big institutions now investing in Bitcoin, which he sees as a positive sign for cryptocurrency's future.

How has their experience as entrepreneurs shaped their views on business and life?

Cameron Winklevoss is one of the most famous entrepreneurs in the world. He has also started several other successful businesses.

Cameron has become an outspoken advocate for Bitcoin and other cryptocurrencies. He is now a partner at [Gemini,](https://www.gemini.com/) a cryptocurrency exchange.

In an interview, Cameron talked about how his entrepreneurial experiences have shaped his views on business and life in general.

He said that "entrepreneurship is all about making the impossible possible. It's about seeing opportunities where others see only risk".

Cameron also said that entrepreneurship taught him the importance of "thinking big" and taking risks. These lessons have helped him become a successful investor and businessman


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