On January 12, the United States Securities and Exchange Commission (SEC) brought charges against both Genesis, a cryptocurrency lending firm and Gemini, a crypto exchange, for offering unregistered securities through Gemini’s “Earn” program.
Gemini Earn is a program offered by the cryptocurrency exchange Gemini for lending and borrowing of crypto assets. Users can lend their digital assets to earn interest, and borrowers can borrow assets and pay interest on the loans.
The SEC announced charges against the firms stating that they “raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors” through the Gemini Earn program, which is an unregistered offering that qualifies as the sale of securities to retail investors.
SEC Chair Gary Gensler commented.
The SEC has filed a complaint in the U.S. District Court for the Southern District of New York, seeking permanent injunctive relief, disgorgement of ill-gotten gains along with prejudgment interest, and civil penalties.
The regulator stated that it is conducting an investigation for other securities law violations from other entities in relation to the Gemini Earn program.