• On January 12th, the US Securities and Exchange Commission (SEC) charged crypto exchange Gemini and crypto lending firm Genesis Global Capital with offering and selling unregistered securities.
• The SEC claims that the Earn program constitutes the offering and sales of securities that should have been registered.
• The SEC also revealed that Genesis and Gemini generated assets worth hundreds of dollars from hundreds of thousands of investors.

The US Securities and Exchange Commission (SEC) recently charged crypto exchange Gemini and crypto lending firm Genesis Global Capital with offering and selling unregistered securities. According to the SEC’s complaint, the two companies launched a product called Gemini Earn in February 2021, which offered customers up to 8% yields for their loaned crypto assets.

In December 2020, Gemini and Genesis reached an agreement to provide customers with the yield-bearing product. Under the agreement, customers loaned their crypto assets to Genesis, which in turn repaid them with interest. The SEC claims that this constitutes the offering and sales of securities that should have been registered.

The SEC further revealed that Genesis and Gemini generated assets worth hundreds of dollars from hundreds of thousands of investors. As a result, the Commission elected to charge the two companies with offering and selling unregistered securities.

The SEC’s announcement is yet another reminder of the importance of registering securities with the Commission to ensure that investors are properly protected. It also serves as a warning to other companies in the cryptocurrency space that they should not engage in similar activities without first registering with the SEC.

Furthermore, the SEC’s action is a reminder to companies in the cryptocurrency space to take all necessary steps to ensure compliance with the Commission’s regulations. This includes registering with the SEC, as well as providing investors with accurate, complete, and timely information about the investments they are making. Companies should also ensure that their products and services meet the SEC’s standards for investor protection.

By taking these steps, companies can ensure that their products are available to the widest possible range of investors and that their investors are adequately protected from potential fraud or other risks. As the cryptocurrency space continues to evolve, companies should remain vigilant in their efforts to ensure compliance with the SEC’s regulations.