SEC accuses Genesis and Gemini of selling unregistered securities.

By The Exchange Team

On Thursday, the SEC charged Genesis and Gemini with offering unregistered securities for a high-yield deposit programme.

In Feb 2021, Gemini, a crypto exchange, and Genesis, a crypto lender, launched Earn, a program that promised upto 8% returns.

Genesis leased Gemini users' crypto and gave a percentage of the profits to Gemini, which withheld an agency charge, sometimes over 4%, as per the SEC.

And gave users the remaining profit. In a Manhattan federal court case, the SEC said Genesis should have filed the product as a security.

SEC officials said Gemini's Earn program, financed by Genesis' loan, fit the requirements by including an investment contract and a note.

These two characteristics are used by the SEC to determine whether an offering is a security.

According to the SEC, the Earn program netted the corporations billions of dollars in cryptocurrency assets.