Breaking News: Genesis Reaches Settlement with SEC for Gemini Earn, Imposes $21 Million Penalty
In a major development in the legal battle between Genesis and Gemini and the U.S. Securities and Exchange Commission (SEC), Genesis Global Capital has reached a settlement with the SEC. The company has agreed to pay $21 million to settle charges of violating securities laws in connection with the now-defunct Gemini Earn program. The SEC announced the settlement on Tuesday.
According to an official press release from the SEC on March 19, Genesis Global Capital has agreed to pay a $21 million penalty and a permanent injunction for selling unregistered securities. The penalty will be paid to the SEC once the bankruptcy court confirms that all claims, including those by retail investors in the Gemini Earn program, have been settled.
SEC Chair Gary Gensler stated, “We charged Genesis with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors.”
In its press release, the SEC emphasized that this settlement sends a clear message to investors and the market that crypto lending platforms must comply with the SEC’s established security laws. Gensler also stressed that compliance with the law is not optional and is necessary to protect investors and foster trust in the market.
Genesis suspended user withdrawals on its platform in November 2022 when the Gemini Earn program had approximately 340,000 customers and $900 million in assets under management, according to the SEC announcement. This settlement comes three weeks after Gemini agreed to pay a $37 million penalty for multiple compliance failures.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented, “The collapse of the Gemini Earn program highlights the unknown risks that investors face when market participants fail to comply with federal securities laws. As this enforcement action demonstrates, no amount of hype and advertising can replace the investor-protection disclosures required by federal securities laws.”
The $21 million fine marks the end of the SEC’s lawsuit against Gemini and Genesis, which was filed in January 2023 for selling unregistered securities through the Gemini Earn program. Gemini has stated that if approved by the bankruptcy court, Earn users can expect to receive 100% of their crypto assets, including any appreciation.
Tags: Crypto news