Zuckerberg Rivals Under Fire from SEC for Freezing Withdrawals of Crypto Investors

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According to the Washington Post, the Securities and Exchange Commission is looking into Gemini, a cryptocurrency exchange platform. It is accused of bypassing disclosure agreements meant to protect investors.

Gemini was started by Tyler Winklevoss and Cameron Winklevoss who were long-time tech entrepreneurs and Olympic rowers.

Gemini, which has high-interest rates, returns on dining, and electric vehicle charging, restrained users from withdrawing their money in November 2022.

Gemini was charged by the SEC along with Genesis for providing unregistered security programs to users.

Registering is “not optional. It’s the law,” says SEC chair Gary Gensler.

In a prepared statement, the official stated that Genesis and Gemini had offered unregistered securities to investors. This was in violation of disclosure requirements meant to protect investors.

Gemini Earn is the program at issue. It promised high-interest returns to users who put their money in crypto accounts. According to the Washington Post, Earn claimed to have promised 8% interest.

Genesis has frozen approximately $900 million. It works in partnership and borrows from Gemini. Customers don’t know when they can access their funds. Gemini and Genesis leaders allegedly fought over who is responsible for returning money to customers.

After the scandal involving Sam Bankman-Fried, a crypto billionaire and founder of FTX, the SEC is trying to crack down on crypto companies. Users of FTX couldn’t withdraw funds from the platform either, and this led to the discovery that the money had disappeared.

RobinHood, an app for trading, also became international news after it stopped users from trading in 2021. This caused a stir and public spats between personalities such as Dave Portnoy.

In 2017, the Winklevoss twins were hailed as the first Bitcoin billionaires worldwide, riding a “10,000% rise in cryptocurrency to a 10-digit net wealth.”

Cameron Winklevoss, representatives from Genesis, have not responded to our requests for comment.