Fighting SEC, Crypto Firm Gemini Picks New Chief Financial Officer

Short dive:

  • Cryptocurrency exchange Gemini Trust Company, LLC has named Tyler Skelton as its finance chief as it faces regulatory scrutiny and market turmoil stemming from the high-profile crash of the FTX exchange, according to a Friday report by Bloomberg.
  • The appointment comes just weeks after the Securities and Exchange Commission instructed both Gemini and its service partner, Genesis Global Capital, to sell unregistered securities through its cryptocurrency lending program, Gemini Earn. The program “constitutes an offer and sale of securities pursuant to applicable law” and therefore should have been filed with the SEC, according to its complaint.
  • Genesis filed for Chapter 11 bankruptcy in early January after dealing with the aftermath of the collapse of cryptocurrency exchange FTX, which led it to halt withdrawals from the Gemini Earn program. The lender listed Gemini among its top 50 creditors and owes the exchange about $765 million, according to the bankruptcy filing.

Dive information:

Skelton is taking the financial helm of Gemini after the exchange, founded in 2015 by Cameron and Tyler Winklevoss, The company’s chairman and CEO, respectively, have repeated cuts to their staff since June, according to a report by Industry Dive’s sister publication Banking Dive.

Before joining the beleaguered cryptocurrency exchange, Skelton worked as CFO for small business payment services provider Till Payments for a year starting in January 2022, according to his LinkedIn profile, which currently shows him as Gemini’s chief finance officer starting this month. He has also held finance roles at crypto insurance marketplace Nayms and crypto financial services provider Bakkt, and is an alumnus of payments company Fiserv, where he served as director, e-commerce finance for three years.

Gemini’s previous chief of finance Jared Shaw left the company last fall to take on a CFO position with cryptocurrency gaming platform Animoca Brands, according to a Sept. 2022 press release. Prior to joining Gemini in May 2019 Shaw worked as a senior manager, financial services consultant for the Big Four accounting firm Ernst & Young and is also an alumnus of the bank Goldman Sachs, according to his LinkedIn profile.

Gemini did not respond to requests for comment. Skelton’s hiring was confirmed to Bloomberg by a person familiar with the matter, according to their report on Friday.

Genesis lent hundreds of millions to the FTP extension affiliate, Alameda Research, according to the Wall Street Journal.

Gemini and Genesis join several other crypto companies that have recently caught the attention of regulators; after a tumultuous 2022, the sector in general is attracting more attention from both financial and political entities. The Financial Accounting Standards Boards are preparing for yet another vote on crypto accounting standards, for example, CFO Dive reported on Friday.

Investors in Gemini’s Earn program have yet to recover their assets, with related parties still trying to reach a resolution, according to the exchange. Gemini said in November that it didn’t have enough liquidity to meet its withdrawal requests before permanently ending the program this month, according to the SEC filing.

At the time of the break, Genesis had about $900 million in assets from 340,000 investors in the Gemini Earn program, according to the SEC.

“Today’s charges build on previous actions to clarify to the market and investing public that cryptocurrency lending platforms and other intermediaries must comply with our time-tested securities laws,” Chairman Gary Gensler said in a statement. “Doing so best protects investors. Promotes confidence in the markets. It’s not optional. It’s the law.”

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