For selling unregistered securities through Gemini’s “Earn” program, the SEC has filed charges against Genesis Global Capital and Gemini Global Capital. Genesis, a division of the crypto conglomerate Digital Currency Group (DCG), has partnered with Gemini to provide the yield-bearing cryptocurrency product to users of the exchange. This was then initiated in February 2021. Customers of Gemini had the option of lending their cryptocurrency to Genesis, with the understanding that Genesis would repay the loan with interest.
Cameron Winklevoss, a co-founder of Gemini, asserts that Genesis and DCG owe Gemini’s clients $900 million. Winklevoss claimed in an open letter on January 10 that the Gemini Earn program, which was terminated on January 8, had more than 340,000 users.
In relation to the Gemini Earn program, the SEC stated that it is looking into additional securities law violations by other entities. The Southern District of New York U.S. District Court received the SEC’s complaint.
The SEC’s complaint alleges that Genesis and Digital Currency Group violated their fiduciary duties to investors by failing to properly manage the Gemini Earn program and falsely claiming the program was in compliance with applicable securities laws.
