Battling SEC, crypto firm Gemini picks new finance head

Dive Brief:

• Cryptocurrency exchange Gemini Trust Company, LLC has appointed Tyler Skelton as its head of finance as it faces regulatory scrutiny and market upheaval stemming from the high-profile collapse of fellow exchange FTX, according to a Friday report by Bloomberg.
• The appointment comes a few short weeks after the Securities and Exchange Commission charged both Gemini and its partner for the service, Genesis Global Capital, with selling unregistered securities through its cryptocurrency lending program, Gemini Earn. The program “constitutes an offer and sale of securities under applicable law” and therefore should have been registered with the SEC, according to its complaint.
• Genesis filed for Chapter 11 bankruptcy earlier in January after facing fallout related to the collapse of crypto 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 approximately $765 million, according to bankruptcy filings.

Dive Insight:

Skelton is taking on Gemini’s financial helm after the exchange — founded in 2015 by Cameron and Tyler Winklevoss, the president and CEO of the company, respectively — has repeated cuts to its staff since June, according to a report from Industry Dive sister publication Banking Dive.  

Prior to joining the beleaguered crypto exchange, Skelton served as CFO for small business payment service provider Till Payments for a year beginning in January 2022, according to his LinkedIn profile — which currently shows him as Gemini’s head of finance as of this month. He also held finance roles at crypto insurance marketplace Nayms and crypto financial services provider Bakkt, and is an alum of payments firm Fiserv where he served as director, ecommerce finance for three years.

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

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

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

Gemini and Genesis join several other crypto firms who have attracted regulators’ attention recently; after a tumultuous 2022, the industry overall is attracting more attention both from financial and political entities. The Financial Accounting Standards Boards is gearing up for yet another vote regarding crypto accounting standards, for example, CFO Dive reported Friday.

Investors in Gemini’s Earn program have yet to recover their assets, with related parties still looking to reach a resolution, according to the exchange. Gemini stated in November it did not have sufficient liquidity to meet its withdrawal requests before finally terminating the program this month, according to the SEC’s complaint.

At the time of the pause, Genesis had approximately $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 make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws,” Chair Gary Gensler said in a statement. “Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law.”