Genesis halted the withdrawals amid a liquidity crunch.

It owes about 340,000 Gemini Earn customers almost $900 million.

The US Securities and Exchange Commission (SEC Securities and Exchange Commission (SEC)The Securities and Exchange Commission (S…Read this Term) charged two feuding companies, Genesis Global Capital and Gemini Trust Company, for offering and selling crypto lending products under Gemini Earn, which the regulator alleged to be unregistered securities.

SEC Charges Genesis and Gemini for Selling Unregistered Securities

“We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors,” said the Chairman of the SEC, Gary Gensler. Further, the SEC is fighting a lengthy court battle with Ripple as it labeled XRP as unregistered securities.

The regulatory action was put in place on Thursday when the lending platform halted withdrawals, and its customers could not take out their deposits. Gemini and its Co-Founders are already facing a class-action lawsuit brought by two Gemini Earn investors with similar charges. That lawsuit accused the exchange and its owners of fraud and violations of the Exchange Act.

“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,” Gensler added.