KEY POINTS:
- Failed crypto lender Genesis has stated that it will seek SEC charges against it to be dropped.
- The charges related to the platform’s “Earn” service, which the SEC has described as having offered unregistered securities.
- SEC head Gary Gensler is also coming under increasing scrutiny for his heavy handed approach to crypto regulation.
Failed crypto lender Genesis is seeking the dismissal of a lawsuit brought against it by the Securities and Exchange Commission in January, which argued that the platform’s popular “Earn” service offered unregistered securities. Genesis filed for Chapter 11 bankruptcy in January this year, partly as a result of the collapse of FTX which occurred in November last year.
Gemini has fought its corner, claiming that its Earn service offered loans – not securities. The company’s founder, Tyler Winklevoss, described the charge as a “parking ticket” in January, and said he looked forward to fighting the charge.
The Winklevoss twins are far from the only ones who think SEC chair Gary Gensler’s approach to crypto regulation is overly heavy handed. Gensler appeared in front of the House Financial Services Committee last month to justify his approach to crypto regulation – with some republican representatives drafting proposals to remove him as head of the regulatory body.
With regulation a central topic relating to the future of crypto prices, Gensler’s approach has been described by many to be hindering investment in the sector in the US. Coinbase has similarly criticized the SEC for its lack of clear guidance, so perhaps these concerns will work in favor of Genesis as it seeks its lawsuit to be dropped.
(About Genesis)
Genesis was a prominent crypto company which was founded in 2013 by Brendan O’Connor and Marco Streng. Genesis became a leading lender for digital assets before its bankruptcy in January 2023. One of Genesis’ core offerings was its cryptocurrency lending platform. Through this platform, individuals and institutions could borrow and lend various cryptocurrencies, including Bitcoin, Ethereum, and other altcoins. The lending service allowed clients to earn interest on their crypto holdings or utilize borrowed funds for various purposes, such as margin trading or capital investments. Today however, the service still owes more than $3.4bn to its 50 largest creditors alone.
