The US Securities and Exchange Commission (SEC) has charged crypto exchange Gemini and cryptocurrency lending platform Genesis Global Capital with selling unregistered securities in the Earn program.
According to the indictment, the Earn landing product offered investors income of up to 8% per year on deposits made.
However, the exchange suspended payments from the program in mid-November coinciding with the financial problems of the program’s lead partner, Genesis Trading's OTC platform.
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The lawsuit document confirms the firm's $900 million debt to the platform's clients and that this affects the interests of 340,000 investors.
According to the complaint:
"Defendants offered and sold the Gemini Earn Agreements through the Gemini Earn Program without registering. As a result, investors lacked material information about the Gemini Earn program that would have been relevant to their investment decisions."
Gemini co-founder Tyler Winklevoss has called the SEC's allegations "super flimsy" and "a bogus fine."