THE CONVENIENT TIMING OF NEW YORK’S LAWSUIT AGAINST GEMINI
Gemini, one of the only crypto exchanges besides Coinbase given legal status to offer services in New York, is now being sued by New York State Attorney Letitia James.
The case against Gemini and the famed bitcoin billionaire Winklevoss brothers, along with Genesis, another crypto firm, was announced late last week.
Perhaps not surprisingly, that announcement came quickly on the heels of the SEC at least partially dropping what has been a losing court case against Ripple Labs, the company behind the XRP token.
Ripple’s technology can quickly and efficiently settle and exchange currencies, compared with rival legacy technologies like the SWIFT system currently used and backed by the U.S. government.
The NY suit was actually initiated by the SEC in January of this year, so Jame’s announcement served as a way of drawing attention away from the SEC legal debacle vs. Ripple.
The suit against Gemini and Genesis alleges that the exchanges offered unregistered “securities” to its customer base.
According to an SEC press release at the time:
“[In December 2020, Genesis, part of a subsidiary of Digital Currency Group, entered into an agreement with Gemini to offer Gemini customers, including retail investors in the United States, an opportunity to loan their crypto assets to Genesis in exchange for Genesis’ promise to pay interest. Beginning in February 2021, Genesis and Gemini began offering the Gemini Earn program to retail investors, whereby Gemini Earn investors tendered their crypto assets to Genesis, with Gemini acting as the agent to facilitate the transaction. Gemini deducted an agent fee, sometimes as high as 4.29 percent, from the returns Genesis paid to Gemini Earn investors. As alleged in the complaint, Genesis then exercised its discretion in how to use investors’ crypto assets to generate revenue and pay interest to Gemini Earn investors.”
In fact, the SEC’s very broad interpretation of what constitutes a “security” has been a glaring unsettled issue in actual Federal law. Virtually all of the statutes the SEC has relied on to term the vast majority of cryptos as securities under agency head Gary Gensler, were written many decades before cryptos emerged as a technology.
A new Republican-controlled Congress has moved legislation forward that would take away the SEC’s current arbitrary and destructive “regulation by enforcement” of arcane outdated laws very loosely interpreted.
At least some of that new legislation has been developed with the specific innovations and potentials of crypto in mind.
But Republicans have lost momentum on cryptos–and everything else–with a bloody internecine war over the House speakership.
Soros-Backed James Solidifying Her Reputation for Political Hit Jobs
James is the controversial AG suing Donald Trump for alleged fraudulent assessments on his holdings.
The suit against him claims his companies wildly overstated valuations of properties, in order to secure loans, etc.
But the course of trial so far has shown that loaning parties—as they always do—make their own assessments, and lend according to their valuations. In the case of Trump, those lenders have actually spoken out as to their satisfaction in their dealings with the longtime successful real estate mogul.
Ironically, independent journalist Laura Loomer has recently turned up information that suggests James may have done what her office is accusing Trump of doing.
TRENDPOST: We have long been informing readers about why crypto innovations call out for their own fair regulatory framework.
But, as is often the case with disruptive technologies, industries, players and pols that make money and benefit from entrenched ways of doing business and delivering services, have an incentive to stop that kind of disruption.
Such is the case with cryptos in the U.S., where:
- A few large tech companies determine how most software is distributed while taking their cut (Google, Apple and Microsoft)
- A world leading financial sector controls the kinds of service offered, influences regulations by lobbying and financially support politician campaigns, and in a myriad of ways, profits off the ways in which money makes money
- The government has thoroughly corrupted and devalued its fiat currency by printing endless reams to fund profligate spending on endless wars and global manipulation, an exorbitant subsidized “green energy” transition, and wreckless billions to aid and abet an outright border invasion (many believe, to collapse the middle class and preside over a neo feudal order that would give elites even more power)
As we have stressed, cryptos will proceed with or without the U.S., in a world which is no longer dominated by one power, as it has been in the post Soviet collapse era from 1989-2016.
In a multipolar polar world, with Russia, China, along with rising regions of Asia, South America, Africa and the Middle East, there are too many places from decentralized, censorship resistant cryptos to flow, and plenty of incentives for different regions to adopt crypto innovations.
The only question is the pace of crypto adoption. There, the U.S. does retain influence, as it remains the predominant financial power.
But that too is slipping, and every day the U.S. bleeds out its treasure in war and wild inflationary overspending, it loses a little more influence and power–over the international financial system, and everything else.