Genesis Global resolves SEC lawsuit with $21 million settlement regarding Gemini Earn lawsuit.

Genesis Global, a company owned by Digital Currency Group, has agreed to pay a $21 million civil penalty to resolve a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The SEC had accused Genesis of violating securities rules through its now-terminated Gemini Earn program, which led to allegations of offering unregistered securities.

As part of the settlement, Genesis has agreed to fully repay its customers and creditors in Chapter 11 bankruptcy proceedings. The SEC’s lawsuit, which was filed last year, targeted both Genesis and Gemini Trust, the company that jointly operated the Gemini Earn program.

The settlement is contingent on Genesis fulfilling its repayment obligations in Chapter 11. This settlement is significant for Genesis as it navigates its ongoing Chapter 11 proceedings, which began after the company filed for bankruptcy in January 2023.

By accepting the settlement offer, the SEC has agreed to the $21 million payment from Genesis to resolve the civil lawsuit. The settlement is dependent on Genesis fully repaying its creditors and customers as part of its Chapter 11 proceedings.

This settlement is part of a broader regulatory crackdown, with the SEC focusing on Gemini Trust as well. Under the terms of the settlement, Genesis will only pay the SEC if it successfully fulfills its repayment obligations in Chapter 11 bankruptcy proceedings. The goal of the settlement is to conserve cash and streamline Genesis’ Chapter 11 proceedings, allowing the company to prioritize returning the maximum amount of cash to its creditors.

In conclusion, Genesis Global’s settlement with the SEC is a strategic move to address legal challenges and its Chapter 11 proceedings. The conditional nature of the settlement ensures that distressed customers will finally be able to recover their lost funds after a year of bankruptcy.