Genesis Global Reaches Settlement with SEC, Pays $21 Million Civil Penalty
Genesis Global and its affiliated entities have reached a settlement with the United States Securities and Exchange Commission (SEC), agreeing to pay a civil penalty of $21 million. The settlement resolves the SEC’s civil lawsuit against Genesis over the “unregistered offer and sale of securities” through the Gemini Earn program.
SEC Settlement Provides Numerous Benefits to GGC
The settlement provides several benefits to GGC’s estates, including the resolution of the SEC’s Civil Action Claim filed in these Chapter 11 Cases. By reaching this settlement, Genesis eliminates the risks, expenses, and uncertainty associated with protracted litigation against the SEC.
The SEC filed its lawsuit against Genesis and Gemini in January 2023, alleging that both firms violated U.S. securities laws through their crypto lending program. This led to Genesis suspending withdrawals on its platform and filing for bankruptcy.
The settlement announcement is the latest development in a series of legal actions involving Gemini, Genesis, Digital Currency Group, and its CEO Barry Silbert.
Genesis Global Trading Settles with NYDFS for $8 Million
In a separate settlement, Genesis Global Trading agreed to pay an $8 million penalty to the New York Department of Financial Services (NYDFS) due to significant failings in its Anti-Money Laundering and cybersecurity programs. As part of the agreement, Genesis Global Trading will cease operations in New York and surrender its BitLicense.
The SEC has been actively filing lawsuits against crypto firms, with Chair Gary Gensler arguing for stricter regulation. Other major players such as Binance, Coinbase, and FTX have also faced legal action from the SEC.
However, the SEC had to withdraw its lawsuit against DEBT Box after admitting to making inaccurate statements in court, which was a significant setback for the commission.
Hot Take: Genesis Settles SEC Lawsuit, Pays $21 Million Civil Penalty
Genesis Global and its affiliated entities have agreed to a settlement with the SEC, ending the civil lawsuit over the unregistered sale of securities through the Gemini Earn program. Under the settlement, Genesis will pay a $21 million civil penalty. This resolution provides several benefits to Genesis, including the elimination of risks and expenses associated with prolonged litigation.
The SEC has been actively pursuing legal action against various crypto firms, including Genesis. This settlement marks another development in the ongoing legal battles between regulators and crypto companies. It also highlights the need for increased regulatory compliance within the industry. As more lawsuits are filed and settlements reached, it is clear that regulatory scrutiny on cryptocurrencies is intensifying.