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Genesis Global Settles SEC Lawsuit for $21 Million

Bankrupt firm Genesis Global Holdco and its affiliates have finally announced a settlement with the United States Securities and Exchange Commission (SEC), marking another major development in the ongoing legal saga.

According to documents filed on January 31 in the U.S. Bankruptcy Court for the Southern District of New York, Genesis debtors have proposed scheduling a hearing on February 14 to formalize the agreement between the firm and the SEC.

This deal, valued at $21 million, stems from the SEC’s civil lawsuit against Genesis concerning the “unregistered offer and sale of securities” via the Gemini Earn program.

The proposed settlement not only represents a resolution to the SEC’s legal action but also serves to mitigate risks and uncertainties associated with litigation, according to Cointelegraph. It underscores the extensive negotiations between the SEC and Genesis, offering potential benefits to the debtors’ estates.

This settlement comes in the wake of an SEC lawsuit filed in January 2023 against Genesis and Gemini, focusing on alleged violations of U.S. securities laws related to their crypto lending program spanning from February 2021 to November 2022.

Genesis’ subsequent suspension of withdrawals on its platform in November 2022 and its subsequent bankruptcy filing in January 2023 further intensified the legal proceedings, leading to a complex web of litigation involving Gemini, Genesis, Digital Currency Group (Genesis’ parent company), and its CEO Barry Silbert.

Interestingly, this settlement also comes after another regulatory enforcement action against Genesis Global Trading, a separate entity from Genesis Global Capital, which agreed to pay an $8 million penalty to the New York Department of Financial Services.

This penalty stemmed from an investigation revealing significant deficiencies in the firm’s Anti-Money Laundering and cybersecurity programs. As part of the agreement, Genesis Global Trading agreed to cease operations in New York and surrender its BitLicense.

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Unlock News Desk, is a group of Blockchain and Crypto enthusiastic young people, working to keep Unlock readers up to date with the industry news. Connect with the team via email: info(@)unlock-bc.com

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