Genesis Global Settles SEC Lawsuit with $21 Million Agreement on Gemini Earn Lawsuit

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Genesis Global, owned by Digital Currency Group, has agreed to a $21 million civil penalty to resolve a lawsuit filed by the U.S. Securities and Exchange Commission. The SEC had previously charged Genesis with breaking securities rules through its now-terminated Gemini Earn program, leading to allegations of offering unregistered securities. 

Details of the Settlement

The crypto lender agreed to pay a $21 million civil penalty, contingent on fully repaying its customers and creditors in Chapter 11. The SEC had accused Genesis of violating securities rules through Gemini Earn, jointly run with Gemini Trust. The settlement, subject to bankruptcy court approval, marks a significant step for Genesis as it navigates its Chapter 11 proceedings initiated through Genesis filing for bankruptcy on January 2023.

Acceptance of SEC Settlement Offer

The U.S. Securities and Exchange Commission has accepted a $21 million settlement offer from Genesis Global Holdco LLC to resolve its civil lawsuit. The lawsuit, filed last year, accused Genesis of violating securities rules through its Gemini Earn program, which was jointly operated with Gemini Trust. 

The settlement is contingent on Genesis fully repaying its creditors and customers as part of its Chapter 11 proceedings. 

Conditional Payment and Regulatory Concerns

The settlement is conditioned on Genesis fully repaying its creditors and customers in Chapter 11. The SEC’s lawsuit, part of a broader regulatory crackdown, had targeted Gemini Trust as well. 

Under the settlement terms, Genesis will pay the SEC only if it fully repays its creditors and customers in Chapter 11 bankruptcy proceedings. The settlement aims to save cash and streamline Genesis’ Chapter 11 proceedings, allowing the company to focus on returning maximum cash to creditors.

In Conclusion

Genesis Global Holdco LLC’s settlement with the SEC reflects a strategic move to navigate legal challenges and its Chapter 11 proceedings. The conditional nature of the settlement enforces distressed customers to finally get back their lost funds after one year of bankruptcy filing.