The SEC’s Lawsuit Against Genesis Ends in Settlement
Genesis Global Holdco, a subsidiary of Digital Currency Group (DCG), has reached a settlement with the U.S. Securities and Exchange Commission (SEC) in a civil lawsuit. The settlement comes as Genesis faces bankruptcy proceedings. Under the terms of the settlement, Genesis will pay $21 million in penalties for allegedly breaking securities laws during its lending program with crypto exchange Gemini.
Settlement Allows Genesis to Pay Fine After Dealing with Claims
In court filings from a Southern District of New York bankruptcy court, it was revealed that Genesis and the SEC reached this settlement through extensive negotiations. The agreement allows Genesis to pay its fine once secured and unsecured claims have been addressed. This resolution eliminates the risks associated with a prolonged lawsuit and benefits the debtors’ estates.
Background on Lawsuit and Tensions Between Genesis and Gemini
Last year, the SEC sued Genesis and Gemini, alleging that they offered unregistered securities to retail investors through Gemini’s Earn product. This legal action occurred amid ongoing tensions between the two companies, with Gemini accusing the crypto lender, its parent company DCG, and Barry Silbert of fraud. These lawsuits followed the collapse of FTX, which exposed questionable business practices.
Genesis Settles Other Litigation Cases
In addition to settling with the SEC, Genesis has resolved litigation cases involving DCG and New York’s Department of Financial Services. New York regulators filed a $1 billion lawsuit against Genesis, Gemini, and Silbert’s DCG, accusing them of fraud and criminal misconduct. As part of the settlement, Genesis agreed to forfeit its New York BitLicense, cease operations in the state, and pay $8 million in fines.
Hot Take: Conclusion
The SEC’s lawsuit against Genesis has concluded with a settlement, requiring the defunct crypto service provider to pay $21 million in penalties. This resolution comes as Genesis faces bankruptcy proceedings. The settlement allows Genesis to pay its fine after addressing secured and unsecured claims, removing the risks associated with a prolonged lawsuit. The legal action by the SEC stemmed from allegations of securities law violations during Genesis’ lending program with Gemini. In addition to settling with the SEC, Genesis has resolved litigation cases with DCG and New York regulators. This settlement marks a significant development in the ongoing legal disputes surrounding Genesis and its business practices.
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