The U.S. Securities and Exchange Commission (SEC) has filed charges against cryptocurrency lender Gemini and its partner Genesis for allegedly selling unregistered securities through Gemini’s “Earn” program.

The SEC claims that Earn, which was introduced in February 2021 and remained in operation until January 2022, enabled the companies to obtain billions of dollars from hundreds of thousands of investors through these unregistered offers.

Under the Earn program, customers of Gemini were able to earn yield by lending their cryptocurrency to the market-making firm Genesis, a subsidiary of Digital Currency Group (DCG).

However, the SEC claims that the companies misrepresented their business model by advertising returns of up to 8% without registering as a lending partnership with the appropriate authorities.

According to open letters written by the co-founder of Gemini Earn, Cameron Winklevoss, Genesis owes $900 million to 340,000 Gemini Earn users.

Furthermore, the SEC claims that U.S. retail investors who participated in the Gemini Earn program suffered significant harm, with approximately 340,000 investors losing funds due to a freeze in withdrawals.

“Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws,” says SEC chair Gary Gensler.

In response to the charges, Cameron Winklevoss defended the firm, claiming that the exchange is working hard to recover investors’ funds and called the SEC’s actions “super lame” and “counterproductive.”

He also stated that Gemini will defend itself against the SEC claims, which he described as a “parking ticket.”