tl;dr
Genesis Global, a crypto lender, has reached a settlement with the US Securities and Exchange Commission, agreeing to a $21 million civil penalty and a permanent injunction. The settlement resolves charges related to the unregistered offer and sale of securities through its crypto asset lending prog...
Genesis Global, a crypto lender, has reached a settlement with the US Securities and Exchange Commission, agreeing to a $21 million civil penalty and a permanent injunction. The settlement resolves charges related to the unregistered offer and sale of securities through its crypto asset lending program, Gemini Earn. Genesis and its affiliates have filed for voluntary Chapter 11 bankruptcy. Additionally, the total value of the cryptocurrency market has experienced a 6% decline, reaching a valuation of $2.31 trillion.
Genesis Global, a crypto lender, has agreed to a final judgment imposing a $21 million civil penalty and a permanent injunction as part of a settlement with the US Securities and Exchange Commission (SEC). The settlement resolves charges against Genesis related to the unregistered offer and sale of “securities” through its crypto asset lending program, the Gemini Earn program. According to the SEC’s investigations, Genesis engaged in the alleged unregistered offer and sale of securities by operating the Gemini Earn program without proper registration. The program allowed Gemini customers, including retail investors in the United States, to loan their crypto assets to Genesis in exchange for promised interest payments. However, in November 2022, Genesis announced that it could not honor withdrawal requests due to a lack of sufficient liquid assets following volatility in the crypto market. Genesis has agreed to pay a $21 million civil penalty for the settlement. However, the SEC will only receive its portion of the penalty after all other allowed claims, including those by retail investors in the Gemini Earn program, have been paid in the bankruptcy court. Genesis and two of its affiliates had filed for voluntary Chapter 11 bankruptcy on January 19, 2023, in the US Bankruptcy Court for the Southern District of New York. SEC Chair Gary Gensler emphasized the importance of compliance with securities laws by crypto lending platforms and intermediaries. He stressed that failing to register such products and bypassing disclosure requirements is not optional but a legal obligation.
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