In January 2023, Gemini and Genesis' cryptocurrency asset lending initiative, Gemini Earn, was charged by the SEC.

Genesis stated in November 2022 that it would not permit Gemini Earn investors to withdraw their cryptocurrency holdings due to insufficient liquid assets to cover withdrawal demands in the wake of market volatility, according per the SEC filing.

About $900 million worth of cryptocurrency assets from 340,000 Gemini Earn investors were held by Genesis at the time.

Following the charges, Genesis declared bankruptcy.

Gemini recently decided to compensate Gemini Earn clients for their participation in the collaboration with $1.1 billion.

"We accused Genesis of evading crucial disclosure obligations intended to safeguard investors by neglecting to register its retail crypto lending product prior to making it available to the public," stated SEC Chair Gary Gensler. "Today's settlement expands on earlier initiatives to demonstrate to the investing public and the market that cryptocurrency loan platforms and other intermediaries must abide by our tried-and-true securities regulations. This best safeguards investors. It encourages market trust. It is required. It is a legal requirement.
 

Director of the SEC's Division of Enforcement Gurbir S. Grewal stated, "The collapse of the Gemini Earn program underscores the unknown risks that investors are exposed to when market participants fail to comply with the federal securities laws." "This enforcement action demonstrates that investor protection disclosures mandated by federal securities laws cannot be replaced by any amount of hype and advertising."