Mi. Feb 1st, 2023

• The US Securities and Exchange Commission (SEC) has charged Gemini Trust Company, LLC and Genesis Global Capital, LLC with the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program.
• The SEC complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, as well as civil penalties.
• SEC Chair Gary Gensler stated that the charges are meant to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with the regulator’s time-tested securities laws.

The US Securities and Exchange Commission (SEC) has brought charges against two major players in the crypto sphere – Gemini Trust Company, LLC and Genesis Global Capital, LLC – for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program. In a press release issued on January 12, 2021, SEC Chair Gary Gensler stated that the charges were meant to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with the regulator’s time-tested securities laws.

The complaint alleges that the Gemini Earn program constitutes an offer and sale of securities and that it should have been registered with the regulator. According to the complaint, the two companies raised „billions of dollars“ worth of crypto assets from „hundreds of thousands of investors“ without registering the offering. As a result, the SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, as well as civil penalties.

The charges come at a time when the SEC is ramping up its enforcement efforts in the crypto space. Earlier this month, the regulator sent subpoenas to various cryptocurrency companies and individuals, seeking information about their activities related to digital assets. The SEC has also taken action against a number of crypto-related companies, including Kik, Telegram, and the Winklevoss twins’ Gemini, for operating unregistered securities offerings.

Gemini and Genesis launched the Gemini Earn program in February 2021, enabling customers to loan their crypto to Genesis in exchange for interest. The program has been criticized by some in the crypto community for its high fees and lack of transparency. The SEC’s charges could put a damper on the program, as the companies could face significant financial penalties if found guilty of violating securities laws.

The SEC has made it clear that it is serious about enforcing securities laws in the crypto space. The regulator will continue to monitor the activities of crypto companies in order to ensure that investors are protected from fraudulent or illegal activities. In the meantime, investors should be mindful of the risks associated with investing in digital assets and should always seek professional advice before making any investment decisions.

Von admin