Genesis agrees to pay $21M to settle SEC case

Zoltan Vardai10 hours agoGenesis agrees to pay $21M to settle SEC caseGenesis agreed to pay a $21 million civil penalty to settle charges related to the Gemini Earn lending program.2133 Total views20 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksGenesis Global Capital has agreed to pay a $21 million civil penalty as part of a final court judgment to settle charges related to the Gemini Earn lending program.

Genesis and Gemini were charged with an unregistered securities offering after launching the Gemini Earn crypto lending program for retail investors.

Gary Gensler, chair of the United States Securities and Exchange Commission (SEC), said in a March 19 announcement:“Today’s settlement builds on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law.”

Under the settlement’s terms, the SEC will only receive a portion of the penalty after other bankruptcy payments have been made, including claims by retail investors.

The $21 million fine marks the end of the lawsuit initiated by the SEC against Gemini and Genesis in January 2023 for selling unregistered securities through the Gemini Earn program.

Genesis suspended user withdrawals on its platform in November 2022 when Gemini Earn had around 340,000 customers and $900 million in assets under management, according to the SEC announcement.

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The fine comes three weeks after Gemini agreed to pay a $37 million penalty for multiple compliance failures “that threatened the safety and soundness of the company,” Superintendent Adrienne Harris of the New York State Department of Financial Services (NYDFS) explainedin a Feb. 28 statement.

The $37 million penalty is part of the settlement reached between Gemini and the NYDFS, which will see Gemini return at least $1.1 billion to customers of the Gemini Earn program through the Genesis bankruptcy proceeding.

If approved by the bankruptcy court, Gemini said it expects Earn users to receive 100% of their cryptocurrency assets back plus appreciation.“If approved, we will be returning over $1.8 billion in value (at today’s prices) — $700 million more than when Genesis halted withdrawals on November 16, 2022.”

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