The Winklevoss firm charged in the US with 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 program, Gemini Earn, which launched in 2021.

The Securities and Exchange Commission (SEC) is responsible for the matter.

Tyler called the complaint “disappointing,” and said his company looks forward to defending itself.

Genesis, which is owned by crypto conglomerate Digital Currency Group, has so far not commented on the allegations.

Gary Gensler, who chairs the SEC, said: “Today’s charges build on previous actions to make clear to the market and investors that crypto-lending platforms and other intermediaries must comply with our time-tested securities laws.

“This best protects investors. It promotes confidence in the markets. It is not optional. It is the law.”

Over the past week, a public feud has erupted between the Winklevoss brothers and Barry Silbert, CEO of Digital Currency Group, the parent company of Genesis.

It was related to Gemini Earn, which was sold to investors as an opportunity to earn up to 7.4% interest on their cryptocurrency holdings.

This negatively impacted 340,000 customers using Gemini Earn, preventing them from withdrawing crypto assets.

Cameron Winklevoss claims Digital Currency Group owes $900m (£737m) to clients of his firm Gemini as a result, and accused Silbert’s group of “defrauding” his clients.

A spokesperson for the Digital Currency Group rejected the allegations, saying they were “malicious, false and defamatory attacks” and described them as a “desperate and unconstructive publicity stunt”.

The SEC regulates the financial markets in the United States and has enforcement powers to initiate civil actions against companies it believes have violated laws.

Through its complaint, filed in the US District Court for the Southern District of New York, it seeks to hit both companies with civil penalties and make them repay “unfortunate gains.”

Earlier this week, Gensler described crypto as “the Wild West.”

These latest charges come as US officials crack down on the sector following the uproar caused by the bankruptcies 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, transferring them without authorization to Alameda, a hedge fund.

Bankman-Fried denies the allegations.