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SEC Files Charges Against Gemini and Genesis

The U.S. Securities and Exchange Commission (SEC) has charged both Genesis and Gemini over unregistered securities trading.

By Mike Hesp
• 1 min read
SEC Files Charges Against Gemini and Genesis

The American Securities and Exchange Commission (SEC) has charged both Genesis and Gemini for unregistered securities trading.

In a press release announced that the agency has filed charges over the unregistered offering and sale of securities to retail investors through the Gemini Earn crypto asset lending program.

"Investigations into other violations of securities laws and other entities and individuals related to the alleged misconduct are ongoing," the SEC wrote.

The Earn program began in 2020 as a collaboration between crypto exchange Gemini and lending platform Genesis, a subsidiary of Digital Currency Group (DCG). Investors could deposit their cryptocurrencies here to earn interest.

"We allege that Genesis and Gemini offered unregistered securities to the public and bypassed the disclosure requirements designed to protect investors," said SEC Chair Gary Gensler.

The Earn program was terminated following a dispute between the companies over customer funds. DCG’s subsidiary holds about $900 million in the exchange's assets after withdrawal freezes.

"Today's charges build on prior actions to make clear to the market and investors that crypto lending platforms and other intermediaries must comply with our established securities laws. This best protects investors," Gensler said.

Gemini co-founder Cameron Winklevoss has already called on to resign DCG CEO Barry Silbert.

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