Gemini and Genesis have been charged by the SEC with the unregistered offering of crypto asset securities.
The SEC has charged Gemini and Genesis with the unregistered offer and sale of ‘crypto asset securities’ through the Gemini Earn product, which halted customer withdrawals at the end of November.
The filing states that Genesis “loaned an additional $575 million worth of crypto assets, including those of Gemini Earn investors, to related party DCG, which DCG used to fund investment opportunities and repurchase DCG stock from non-employee shareholders in secondary transactions.”
The news comes after Barry Silbert, the founder and CEO of DCG, said on Twitter, “it has been challenging to have my integrity and good intentions questioned after spending a decade pouring everything into this company and the space with an unrelenting focus on doing things the right way.”
Tyler Winklevoss, the co-founder of Gemini, claims that the SEC’s lawsuit against Genesis and Gemini is counterproductive and does nothing to advance the goal of recovering Earn users’ assets.
Nexo, another large CeFi player, reportedly had its Bulgaria-based office raided by local law enforcement yesterday as part of an investigation into suspected money laundering and tax evasion.
The company has over $2.4B of customer liabilities and has minimal on-chain reserves based upon wallets known to be controlled by the company. They also hold a significant amount of value in its native token, NEXO, which feels eerily similar to the FTX/Alameda fiasco.
It is relatively uncommon for protocols to redistribute revenue to ecosystem participants, but the few that do trade closer to their underlying fundamentals. GMX, a margin trading DEX, returns 30% of trading fees to GMX stakers. Despite all of the volatility over the past year, the GMX token price has shown a positive correlation with fee revenue generation. This could be where the future of crypto is heading, as most crypto assets today serve solely as governance tokens with very little utility or value accrual.
Gains Network’s gTrade launched on Arbitrum two weeks ago and has attracted over $6M of TVL versus the $14M on its chain of origination, Polygon. Yesterday the margin trading dApp saw $60M and $100M of trading volume on Arbitrum and Polygon respectively. gDAI LPs, the counterparty to traders, are earning a 20%+ APR on Arbitrum while GNS stakers are earning 8% APR, both paid out in DAI. I view LPing DAI or buying and staking GNS to be a high quality way to get exposure to a rapidly growing competitor to GMX.
The growing number of validators points to “increasing confidence, positive market sentiment, and conviction in the Ethereum ecosystem as a whole,” the chief marketing officer at Blocknative told Blockworks
The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.