SEC Files Suit Against Gemini and Genesis Over Crypto “Earn” Program

Posted on January 27th, 2023 at 1:46 PM
SEC Files Suit Against Gemini and Genesis Over Crypto “Earn” Program

From the Desk of Jim Eccleston at Eccleston Law.

The Securities and Exchange Commission (SEC) has filed suit against two crypto brokerages, Genesis Global Capital and Gemini Trust Co., for breaching federal securities laws.

The SEC’s complaint alleges that the brokerages improperly raised billions of dollars through the Gemini Earn program. While the program enabled clients to loan out their assets in exchange for interest payments, the SEC determined that the program constituted an offering of unregistered securities. Gemini created Earn in February 2021, which would permit customers to earn passive returns on their coins in exchange for the right to lend the tokens out.

The program offered rates that far exceeded those offered by traditional banks, which led to the program’s surpassing $3 billion in assets by the end of 2021. Gemini’s co-founder, Tyler Winklevoss, responded to the SEC’s allegations on Twitter by calling the complaint a “manufactured parking ticket.” Winklevoss additionally noted that Gemini had been discussing Earn with the SEC for the past 17 months, and that the SEC filed an enforcement action only when Genesis paused withdrawals from the program. Those will not be defenses, but make for an interesting showdown.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, sec

Return to Archive

TESTIMONIALS

Previous
Next

If the regulators are after you, and are trying to make a case against you, and you are going to contest their allegations against you, make sure you have the best securities industry defense lawyers, Eccleston Law Firm. My case was spun into a combination of penalties including fines, cash settlements, CE courses and suspension. They were the best I have seen in action. When all was said and done, they had done their magic, my situation was negotiated and settled with a simple "letter of caution" and a case closed without action. It is the most important legal business decision you will ever make, make it Eccleston Law.

Rick R.

LATEST NEWS AND ARTICLES

November 28, 2023
Arbitration Mandated for Former Morgan Stanley Advisors' Class Claim on Deferred Compensation

A federal judge in Manhattan has granted Morgan Stanley’s request to transfer a potential class action lawsuit to arbitration.

November 28, 2023
Wells Fargo Under SEC Scrutiny for Cash Sweep Programs

The Securities and Exchange Commission (SEC) is investigating Wells Fargo & Company over cash sweep options provided to investment advisory clients.

November 22, 2023
FINRA Alleges $2 Million in Client Losses and $2 Million in Commissions Due to Advisor's Churning

According to a Financial Industry Regulatory Authority (FINRA) complaint, Stewart "Paxton" Ginn excessively traded accounts over two and a half years, resulting in $2.22 million in losses and $2.24 million in commissions for him and his firm.