Gemini and Genesis charged by SEC with selling unregistered securities
12 Jan, 2023
By Jesse Coghlan
The charges relate to Gemini’s crypto asset lending program, Gemini Earn, according to the Securities and Exchange Commission.
The United States Securities and Exchange Commission (SEC) on Jan. 12 charged cryptocurrency lending firm Genesis Global Capital and crypto exchange Gemini with offering unregistered securities through Gemini's “Earn” program.
In December 2020, Genesis, a subsidiary of crypto conglomerate Digital Currency Group (DCG) entered into a deal with Gemini to offer the exchange’s customers the yield-bearing crypto product. This was then launched in February 2021.
Under the agreement, Gemini customers could loan their crypto to Genesis under the promise the latter would repay the loan with interest. Genesis had full control over how it would earn a yield to repay Gemini creditors.
We @SECGov charged Genesis & Gemini for the unregistered offer & sale of crypto asset securities through Gemini Earn.Crypto intermediaries need to comply with our securities laws. This protects investors. It promotes trust in markets. It’s not optional. It’s the law.
— Gary Gensler (@GaryGensler)January 12, 2023
In a statement, the SEC said its complaint alleges that the Gemini Earn program constitutes an offer and sale of securities and should have been registered with the commission
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