Just In: Genesis and Gemini charged by SEC Over Lending Product

• On Thursday, the US regulator, SEC sued both Genesis Global Capital and Gemini Trust Exchange.
• The SEC alleges that the Gemini Earn product constituted the offering of unregistered securities

The Securities and Exchange Commission (SEC) has charged two cryptocurrency firms, Gemini and Genesis, with selling unregistered securities in connection with customer deposits.

The SEC alleges that Gemini and Genesis offered a crypto asset scheme called Gemini Earn, which promised high yields to customers. The SEC claims that this scheme was actually a series of investment contracts, which are securities that must be registered with the SEC before they can be offered to the public.

The SEC also alleges that Gemini and Genesis misled customers about the risks associated with the Gemini Earn program. The SEC claims that Gemini and Genesis failed to disclose that the program was not insured by the FDIC or any other government agency, and that customers could lose their entire investment if Genesis went bankrupt.

The SEC’s charges against Gemini and Genesis are the latest in a series of enforcement actions against cryptocurrency firms. In recent months, the SEC has also charged BlockFi, Celsius Network, and Voyager Digital with selling unregistered securities.

The SEC’s actions against Gemini and Genesis send a clear message to the cryptocurrency industry that the SEC is serious about enforcing securities laws in the crypto space. Crypto firms that offer investment products to the public must comply with the same securities laws as traditional financial firms.

Key Takeaways

• The SEC has charged Gemini and Genesis with selling unregistered securities in connection with customer deposits.
• The SEC alleges that Gemini and Genesis misled customers about the risks associated with the Gemini Earn program.
• The SEC’s actions against Gemini and Genesis send a clear message to the cryptocurrency industry that the SEC is serious about enforcing securities laws in the crypto space.

Impact

The SEC’s charges against Gemini and Genesis could have a significant impact on the cryptocurrency industry. The charges could deter other cryptocurrency firms from offering investment products to the public, and it could make it more difficult for cryptocurrency firms to raise capital. The charges could also lead to increased scrutiny of the cryptocurrency industry by regulators.

It is important to note that Gemini and Genesis have denied the SEC’s allegations. The case is still pending, and it is too early to say what the outcome will be.