Genesis Settles Lawsuit for $21 Million
Crypto lender Genesis has agreed to pay $21 million to settle a federal lawsuit accusing the company of selling unregistered securities. The settlement was revealed in a filing with the U.S. Bankruptcy Court in the Southern District of New York.
SEC Allegations and Settlement Details
In January 2022, the Securities and Exchange Commission (SEC) filed a lawsuit against Genesis, claiming that the company raised billions of dollars in an unregistered securities offering. According to the filing, Genesis and Gemini Trust Company engaged in this activity through the Gemini Earn program between February 2021 and November 2022.
The settlement specifies that the SEC will receive a $21 million claim against Genesis, which will be paid if creditors are repaid.
Genesis’ Bankruptcy and Troubles
Following the collapse of FTX, Genesis, a subsidiary of Digital Currency Group (DCG), filed for bankruptcy. The company was also exposed to the collapsed crypto venture fund Three Arrows Capital.
Genesis had been a primary partner for Gemini’s Earn program, allowing users to earn interest on their crypto. However, customer withdrawals were frozen after FTX’s collapse, leaving creditors waiting for their money.
Hot Take: Genesis Settles SEC Lawsuit for $21 Million
Failed crypto lender Genesis has reached a $21 million settlement with the SEC over allegations of selling unregistered securities. The lawsuit claimed that Genesis raised billions of dollars from investors through its unregistered securities offering. As part of the settlement, the SEC will receive a $21 million claim against Genesis, which will be paid if creditors are repaid. This development comes after Genesis filed for bankruptcy following its exposure to the collapsed crypto venture fund Three Arrows Capital. Genesis had been a primary partner for Gemini’s Earn program, but faced difficulties after the collapse of FTX and the subsequent freezing of customer withdrawals.
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