SEC indicts Gemini

Bitcoin exchange Gemini and crypto lending platform Genesis Global Capital sold unregistered securities in the Earn program. This is stated in the lawsuit of the US Securities and Exchange Commission (SEC).

Earn’s landing product offered investors an income of up to 8% per annum on deposits made. In mid-November, Gemini suspended payments for the program. This happened against the backdrop of financial problems of the main partner, the Genesis Trading OTC platform.

The document confirmed media information about the firm’s $900 million debt to the exchange’s clients. The interests of 340,000 investors were affected.

“The Defendants offered and sold Gemini Earn Agreements without being registered with the regulator. As a result, customers were missing essential information […]that would be relevant to their investment decisions,” the lawsuit says.

Gemini co-founder Tyler Winklevoss called the SEC allegations “super flimsy” and “a trumped up penalty ticket.”

“The Earn program was regulated by the NYDFS. We have been discussing the Earn program with the SEC for over 17 months. They never raised the possibility of any enforcement action until Genesis put the withdrawal on hold on November 16th,” he explained.

Winklevoss promised to defend Gemini from the SEC allegations and “make sure it’s not a distraction.”

In December 2022, a group of investors filed a class-action lawsuit against Gemini and its founders, the Winklevoss brothers, for selling unregistered securities in the form of Earn interest-bearing accounts.

Earlier, Cameron Winklevoss, in another open letter, called on the head of Digital Currency Group, Barry Silbert, to resign due to Genesis Trading’s $900 million outstanding debt under the Earn program.


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