Genesis Settles $21 Million Agreement with SEC for Gemini Earn Program

Date: 2024-02-02 Author: Dima Zakharov Categories: IN WORLD
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Genesis Global Holdco and its affiliated entities have disclosed that they have reached an agreement with the U.S. Securities and Exchange Commission (SEC) to settle a $21 million lawsuit. This settlement stems from an ongoing civil suit filed against Genesis for its involvement in the "unregistered offering and sale of securities" through the Gemini Earn program.

In a statement issued on January 31st, Genesis debtors proposed a hearing date of February 14th in the Southern District of New York Bankruptcy Court to seek approval for the deal with the SEC. According to the debtors, the SEC will receive $21 million in exchange for resolving the civil suit against Genesis related to its Gemini Earn program.

The statement mentions, "The global settlement is the result of extensive negotiations between the SEC and GGC. The proposed settlement, in addition to other benefits to the debtors' estate, will resolve the SEC's civil claims arising out of these matters pending in Chapter 11 and eliminate the risks, expenses, and uncertainties associated with protracted litigation against the SEC."

This agreement will settle the SEC's lawsuit against Genesis and Gemini, which was filed in January 2023. The SEC's case focused on the actions of the two companies from February 2021 to November 2022, alleging that they violated U.S. securities laws through their crypto lending program.

Genesis suspended withdrawals on its platform in November 2022 and filed for bankruptcy in January 2023. The SEC lawsuit and Genesis' bankruptcy filing resulted in multiple legal actions involving Gemini, Genesis, and the parent company, Genesis Digital Currency Group, along with its CEO, Barry Silbert.

The announcement of this settlement follows a series of ongoing legal battles between the financial regulator and cryptocurrency firms operating in the United States, including Ripple, Binance, Coinbase, and Kraken. In August 2023, the SEC announced a $24 million settlement with Bittrex and its former CEO, William Shihara, over the operation of an unregistered exchange.

On January 12th, Genesis Global Trading, a separate organization from Genesis Global Capital not involved in the Gemini Earn program, agreed to pay an $8 million fine to the New York Department of Financial Services following an investigation that revealed "significant deficiencies" in the firm's anti-money laundering and cybersecurity programs. The company agreed to cease operations in New York and relinquish its BitLicense as part of the deal.
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