Crypto firms Genesis and Gemini charged by SEC with selling unregistered securities

January 13, 2023

The Securities and Exchange Commission on Thursday charged crypto firms Genesis and Gemini with allegedly selling unregistered securities in connection with a high-yield product offered to depositors. Gemini, a crypto exchange, and Genesis, a crypto lender, partnered in February 2021 on a Gemini product called Earn, which touted yields of up to 8% for customers. Genesis should have registered that product as a securities offering, SEC officials said. Gemini's Earn program, supported by Genesis' lending activities, met the SEC's definition by including both an investment contract and a note, SEC officials said. SEC officials said the possibility of a DCG or Genesis bankruptcy had no bearing on deciding whether to pursue a charge.