The Securities and Exchange Commission on Thursday charged cryptocurrency lender Genesis Global Capital and cryptocurrency exchange Gemini Trust with offering unregistered securities through a program that promised investors high interest on deposits.

The SEC said that Genesis, a subsidiary of Digital Currency Group, and Gemini, which is run by Tyler and Cameron Winklevoss, had raised billions of dollars of assets from hundreds of thousands of investors without registering the program, which was called Gemini Earn.

By doing so, Genesis and Gemini bypassed “disclosure requirements designed to protect investors,” SEC Chair Gary Gensler said in a statement. He added that the charges should “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.”

Genesis later froze withdrawals. About 340,000 Earn customers are out about $900 million in crypto assets, the SEC said.

Genesis did not immediately respond to a request for comment. In a tweet, Tyler Winklevoss said it was “disappointing” that the agency acted while Gemini and other creditors were working together to recover funds.

The SEC’s action against Genesis and Gemini is part of the fallout of cryptocurrency markets melting down last year. A crash in the prices of cryptocurrencies like Bitcoin last spring led to a domino effect, with crypto hedge funds such as Three Arrows Capital and other crypto companies declaring bankruptcy. In November, FTX, a major cryptocurrency exchange run by entrepreneur Sam Bankman-Fried, also collapsed after the crypto equivalent of a bank run.

In the wake of these failures, regulatory scrutiny of crypto companies has heightened.

In its complaint on Thursday, the SEC said that Genesis partnered with Gemini on the program that let customers earn high interest on assets they lent to Genesis. Gemini facilitated the transactions, the SEC said, pooling customer assets and transferring them to Genesis. In return, Gemini deducted an agent fee of as high as nearly 4.3% from the returns that Genesis paid to Gemini Earn investors.

Both companies, along with Genesis’s parent company, DCG, had much to gain from the endeavor, the SEC said. Genesis lent about $575 million in crypto — some belonging to Gemini Earn investors — to DCG, according to the complaint.

After FTX imploded in November, Genesis froze withdrawals, leaving Gemini Earn customers stranded, according to the complaint.

Gemini has recently been unsuccessfully negotiating with Genesis and DCG for the release of Earn customer assets. The negotiations have come to a standstill in recent weeks, with the Winklevosses publicly accusing DCG of stalling to keep funds that belong to its customers.

The Winklevosses said DCG and Genesis have misrepresented financial information and mischaracterized the value of company assets to give the impression that Genesis was in better health than it was. DCG founder and CEO Barry Silbert disputed the allegations in a letter to shareholders this week.

Gemini Earn is not the first crypto lending program that the SEC has cracked down on. Last year, the agency reached a $100 million settlement with now-bankrupt crypto lender BlockFi. In 2021, the agency also blocked the crypto exchange Coinbase, which abandoned its plans to start a yield product.

In June, the Commodity Futures Trading Commission filed a civil case against Gemini that claimed the crypto firm misled regulators in 2017 about its plans for a Bitcoin futures product. The CFTC said Gemini “made false or misleading” statements during the regulatory review process for the bitcoin futures product.

Some Earn customers have filed arbitration cases against Gemini over their frozen assets, with others lining up for a proposed class action suit, which was filed in New York federal court last month. The lawsuit, like the SEC’s case, said Earn was an unregistered securities offering and that investors were owed more information about the risks associated with the accounts.

This week, Gemini filed an answer to that lawsuit, arguing that it should be aimed at Genesis and DCG. Gemini also disavowed any responsibility for the frozen withdrawals, arguing that customers technically cut a deal with Genesis and not Gemini.

In an interview this week, Tyler Winklevoss said Gemini believed customers could be made whole. “There’s a path to getting a deal done that’s a resolution for Earn users,” he said.

This article originally appeared in The New York Times.