Opinion by Joe Fotalattee
Washington’s legal crackdown on cryptocurrencies was long overdue, and the SEC on Friday, January 15, 2023 accused some of the biggest names in the industry of running an unauthorized lending service that caused significant losses for clients.
The U.S. Securities and Exchange Commission (SEC) accused Genesis Global Capital, a cryptocurrency lender, and Gemini, a former business partner, of selling unregistered securities through Gemini Earn. Genesis is a division of the Barry Silbert-founded Digital Currency Group, while Tyler and Cameron Winklevoss, who are both billionaires, run Gemini.
The companies are charged with using the success of Gemini Earn, which guaranteed investors a return of up to 8%, to raise billions. The issue: According to the SEC, they broke securities laws by disregarding “disclosure requirements intended to protect investors.”
The SEC claims that 340,000 Earn customers have a $900 million loss. Injunctive relief, civil penalties, and restitution for “ill-gotten gains” are demanded in the complaint.
Additional writing on the wall for the crypto bust is Crypto.com also announcing on Friday that 20% of its staff would be laid off. The crypto exchange grew “ambitiously,” according to CEO Kris Marszalek, but was unable to withstand the demise of Sam Bankman-Fried’s crypto empire FTX, he wrote in a blog post.
Losing a job is better than losing your life savings. With Vietnamese media companies pushing pump-and-dump schemes on their unsuspecting readers, one wonders what billionaires in Vietnam are behind the positive spin of Crypto, which has been proven to be riddled with fraud and lacking intrinsic value.
Vietnam appears to lack any “disclosure requirements intended to protect investors” and the government should step in with regulations to prevent the loss of millions, and the media should not be creating a new financial crisis to benefit the billionaires.
