Genesis Global Settles SEC Lawsuit over Gemini Earn Program
Crypto lender Genesis Global has reached a settlement with the U.S. Securities and Exchange Commission (SEC) regarding its bankrupt Gemini Earn lending program. As part of the agreement, Genesis will pay a $21 million civil penalty, which is dependent on the full repayment of customers during the ongoing bankruptcy proceedings.
Genesis Agrees to $21 Million Settlement
The settlement, filed in U.S. Bankruptcy Court in Manhattan, allows Genesis to avoid the expenses and uncertainties associated with defending itself against the SEC’s allegations of illegally selling securities. While not admitting any wrongdoing, this resolution allows Genesis to focus on repaying customers and other creditors during its bankruptcy proceedings. The $21 million fine will only be enforced if Genesis fulfills its financial obligations.
Genesis Moves Forward with Liquidation Plan
To expedite the resolution and streamline the bankruptcy process, Genesis is implementing a liquidation plan that aims to repay customers in cash or cryptocurrency, depending on their deposited currency in the Earn program. The company will seek court approval for its bankruptcy plan on February 14. The settlement agreement is pending approval by a bankruptcy judge and would be a significant step in resolving legal challenges related to the Gemini Earn program.
Genesis Faces Potential Industry Ban
The SEC lawsuit was initiated just before Genesis filed for bankruptcy protection. It centers around Genesis and Gemini Trust’s joint management of the Gemini Earn program. Allegations from the SEC claim that both companies illegally sold securities to hundreds of thousands of investors through the program. In addition to the SEC lawsuit, Genesis, Gemini, and Digital Currency Group (DCG) are also facing a parallel enforcement action brought by New York Attorney General Letitia James, who seeks to ban these companies from the financial investment industry in New York and secure restitution for affected investors.
Hot Take: Genesis Global Settles SEC Lawsuit
Crypto lender Genesis Global has settled with the U.S. Securities and Exchange Commission (SEC) over its bankrupt Gemini Earn lending program. The settlement allows Genesis to avoid legal expenses and uncertainties by paying a $21 million civil penalty, contingent on repaying customers during bankruptcy proceedings. Genesis plans to repay customers in cash or cryptocurrency through a liquidation plan, pending court approval. This settlement is a significant step in resolving legal challenges surrounding the Gemini Earn program. However, Genesis still faces a potential industry ban as it deals with parallel enforcement actions brought by the New York Attorney General.
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