NewsletterBreaking: Genesis Agrees $21 Million Settlement With SEC Over Gemini Earn
Highlights
- U.S. SEC officially announces settlement with Genesis Global Capital.
- Genesis agrees on paying a $21 million civil penalty and imposing a permanent injunction over securities law violation.
- SEC Chair Gary Gensler reminds crypto entities about compliance with time-tested securities laws.
In a landmark development in the Genesis and Gemini lawsuit brought by the U.S. Securities and Exchange Commission (SEC), Genesis Global Capital has decided to settle with the SEC and agreed to pay $21 million to settle the charges over Gemini Earn program.
Genesis Settles With US SEC
According to an official press release by the US SEC on March 19, Genesis Global Capital has agreed to pay a $21 million penalty and a permanent injunction that it sold unregistered securities. A New York federal judge on Monday approved a $21 million settlement to resolve the lawsuit against Genesis and Genesis Trust Co.
The SEC will receive the penalty after the bankruptcy court notifies the completion of all payments of claims, including claims by retail investors in the Gemini Earn program.
“We charged Genesis with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors,” said SEC Chair Gary Gensler.
Also Read: GBTC Bitcoin ETF Fees to Drop Soon, Says Grayscale CEO
Genesis and Gemini Earn Impact Over Crypto Market
While the $21 million penalty means the end of the lawsuit, Genesis and Gemini Earn have impacted the markets globally. Following the collapse of FTX, crypto lender Genesis halted repayments, withdrawals, and new loan originations. South Korea’s crypto exchange Gopax’s GoFi earn product, which is linked to Genesis, also suffered withdrawal issues.
The company had gone under bankruptcy and the SEC charged Genesis and Gemini Trust in January 2023. Gemini, a New York-based cryptocurrency exchange, has reached a settlement agreement to return $1.1 billion in digital assets to users of its Earn program, following the bankruptcy of crypto lending company Genesis.
Meanwhile, Genesis was cleared by the U.S. Bankruptcy Court in the Southern District of New York to sell off its $1.6 billion worth of GBTC to repay creditors.
Also Read: Empower Oversight Sues SEC Over Refusing FOIA Compliance, ETHGate
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