Genesis Global Settles SEC Lawsuit for $21 Million
Genesis Global, a subsidiary of Digital Currency Group (DCG), has reached a settlement agreement with the US Securities and Exchange Commission (SEC) to resolve a civil lawsuit. The SEC accused Genesis of violating securities rules through its now-defunct Gemini Earn program. As part of the settlement, Genesis has agreed to pay a $21 million civil penalty, depending on its ability to repay customers and creditors under Chapter 11 bankruptcy proceedings.
SEC Allegations Resolved
The SEC’s complaint alleged that between February 2021 and November 2022, Genesis Global and Gemini Trust Company engaged in an unregistered offer and sale of securities to US retail investors through the Gemini Earn program. This violated Sections 5(a) and 5(c) of the Securities Act 1933. Previously seeking dismissal, Genesis and the SEC have now agreed on a settlement after extensive negotiations.
According to court documents filed in the New York bankruptcy court, the settlement agreement states that the SEC will receive a $21 million allowed general unsecured claim against Genesis Global. This claim will be considered complete satisfaction of the civil action claim brought by the SEC.
Genesis Global’s Chapter 11 Progress
The proposed settlement agreement aims to eliminate risks, expenses, and uncertainties associated with prolonged litigation against the SEC. It benefits Genesis’ estates and will become effective upon entry of the Final Judgment by the District Court, pending approval from the bankruptcy court.
If the Bankruptcy Court does not approve the Settlement Agreement before issuing a non-appealable discharge order, the SEC can petition the District Court for an order determining disgorgement, pre-judgment interest, and/or civil penalty amounts.
Genesis Global’s $21 Million Settlement
The $21 million settlement between Genesis Global and the SEC marks a significant development in the legal battle surrounding the Gemini Earn program. The agreement, reached through extensive negotiations, provides a way forward for Genesis as it navigates Chapter 11 bankruptcy proceedings. Subject to court approval, the settlement aims to close the SEC’s civil action and establish a framework for resolving outstanding claims.
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Hot Take: Genesis Global Settles SEC Lawsuit for $21 Million
Genesis Global, a subsidiary of Digital Currency Group (DCG), has reached a $21 million settlement with the US Securities and Exchange Commission (SEC) to resolve allegations of violating securities rules through its Gemini Earn program. The settlement allows Genesis to move forward with its Chapter 11 bankruptcy proceedings, eliminating the risks and expenses associated with prolonged litigation. This resolution signifies a significant step in resolving the legal battle surrounding the Gemini Earn program and paves the way for closing the SEC’s civil action. Overall, this settlement provides clarity and stability for Genesis Global as it works towards resolving outstanding claims.
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