Genesis Settles SEC Lawsuit, Agrees to $21 Million Civil Penalty for Earn Product
Genesis Global and its affiliated entities have reached a settlement with the United States Securities and Exchange Commission (SEC), agreeing to pay a civil penalty of $21 million.
The settlement, which resolves the SEC’s civil lawsuit against Genesis over the “unregistered offer and sale of securities” through the Gemini Earn program, was proposed in a filing on January 31 in the U.S. Bankruptcy Court for the Southern District of New York.
According to the filing, the proposed settlement is the result of extensive negotiations between Genesis Global Holdco (GGC) and the SEC.
GENESIS SETTLES SEC LAWSUIT OVER GEMINI EARN PROGRAM
Genesis Global Holdco, a subsidiary of Digital Currency Group, has agreed to pay $21 million to settle an SEC lawsuit over its lending program.
The settlement aims to resolve the SEC's claims and eliminate the risks and… pic.twitter.com/A9RVeeBKun
— Crypto Town Hall (@Crypto_TownHall) February 2, 2024
SEC Settlement Provides Numerous Benefits to GGC
The settlement will provide several benefits to GGC’s estates, including the resolution of the SEC’s Civil Action Claim filed in these Chapter 11 Cases.
By reaching this settlement, Genesis would eliminate the risks, expenses, and uncertainty associated with protracted litigation against the SEC.
The SEC filed its lawsuit against Genesis and Gemini in January 2023, focusing on the period between February 2021 and November 2022.
The commission alleged that both firms violated U.S. securities laws through their crypto lending program.
As a consequence of the legal proceedings, Genesis suspended withdrawals on its platform in November 2022 and subsequently filed for bankruptcy in January 2023.
The settlement announcement marks the latest development in a series of legal actions between Gemini, Genesis, Genesis’ parent company Digital Currency Group, and its CEO Barry Silbert.
Genesis Global Trading to Pay $8M to DFS
On January 12, Genesis Global Trading, an entity distinct from Genesis Global Capital and unrelated to the Gemini Earn program, agreed to pay an $8 million penalty to the New York Department of Financial Services.
The settlement followed an investigation that uncovered “significant failings” in the company’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.
In a similar vein, the SEC recently announced a $24 million settlement in its case against Bittrex and its former CEO William Shihara for operating an unregistered exchange.
SEC announces settlement with Bittrex…
“As part of the settlement, the defendants consented to entry of final judgments that permanently enjoin Bittrex and Shihara from violating Sections 5, 15(a), and 17A of the Securities Exchange Act of 1934…” pic.twitter.com/XXcyA8BhmX
— David Orr (@davidorr_31) August 10, 2023
Over the past year, the SEC has filed numerous lawsuits against crypto firms, with SEC Chair Gary Gensler consistently asserting that most cryptocurrencies should be classified as securities.
For one, the agency initiated a civil case against Sam Bankman-Fried, co-founder of FTX.
In addition to the case against Bankman-Fried, the SEC filed lawsuits against other major crypto players, including Binance, its CEO Changpeng Zhao, and Coinbase.
All three entities have denied any wrongdoing and have requested the dismissal of the regulator’s cases.
However, in a major blow to the commission, the agency was recently forced to withdraw its lawsuit against crypto startup DEBT Box after admitting to making inaccurate statements in court.
The SEC acknowledged in late December that it had made inaccurate statements and conceded that it had not met the expectations of accuracy and candor in court.
Prior to that, Judge Shelby criticized the agency’s lawyers and demanded an explanation for the “false or misleading” statements made by the SEC, claiming that DEBT Box was attempting to move assets offshore to evade regulatory oversight.
The post Genesis Settles SEC Lawsuit, Agrees to $21 Million Civil Penalty for Earn Product appeared first on Cryptonews.
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Genesis Settles SEC Lawsuit, Agrees to $21 Million Civil Penalty for Earn Product
Genesis Global and its affiliated entities have reached a settlement with the United States Securities and Exchange Commission (SEC), agreeing to pay a civil penalty of $21 million.
The settlement, which resolves the SEC’s civil lawsuit against Genesis over the “unregistered offer and sale of securities” through the Gemini Earn program, was proposed in a filing on January 31 in the U.S. Bankruptcy Court for the Southern District of New York.
According to the filing, the proposed settlement is the result of extensive negotiations between Genesis Global Holdco (GGC) and the SEC.
GENESIS SETTLES SEC LAWSUIT OVER GEMINI EARN PROGRAM
Genesis Global Holdco, a subsidiary of Digital Currency Group, has agreed to pay $21 million to settle an SEC lawsuit over its lending program.
The settlement aims to resolve the SEC's claims and eliminate the risks and… pic.twitter.com/A9RVeeBKun
— Crypto Town Hall (@Crypto_TownHall) February 2, 2024
SEC Settlement Provides Numerous Benefits to GGC
The settlement will provide several benefits to GGC’s estates, including the resolution of the SEC’s Civil Action Claim filed in these Chapter 11 Cases.
By reaching this settlement, Genesis would eliminate the risks, expenses, and uncertainty associated with protracted litigation against the SEC.
The SEC filed its lawsuit against Genesis and Gemini in January 2023, focusing on the period between February 2021 and November 2022.
The commission alleged that both firms violated U.S. securities laws through their crypto lending program.
As a consequence of the legal proceedings, Genesis suspended withdrawals on its platform in November 2022 and subsequently filed for bankruptcy in January 2023.
The settlement announcement marks the latest development in a series of legal actions between Gemini, Genesis, Genesis’ parent company Digital Currency Group, and its CEO Barry Silbert.
Genesis Global Trading to Pay $8M to DFS
On January 12, Genesis Global Trading, an entity distinct from Genesis Global Capital and unrelated to the Gemini Earn program, agreed to pay an $8 million penalty to the New York Department of Financial Services.
The settlement followed an investigation that uncovered “significant failings” in the company’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.
In a similar vein, the SEC recently announced a $24 million settlement in its case against Bittrex and its former CEO William Shihara for operating an unregistered exchange.
SEC announces settlement with Bittrex…
“As part of the settlement, the defendants consented to entry of final judgments that permanently enjoin Bittrex and Shihara from violating Sections 5, 15(a), and 17A of the Securities Exchange Act of 1934…” pic.twitter.com/XXcyA8BhmX
— David Orr (@davidorr_31) August 10, 2023
Over the past year, the SEC has filed numerous lawsuits against crypto firms, with SEC Chair Gary Gensler consistently asserting that most cryptocurrencies should be classified as securities.
For one, the agency initiated a civil case against Sam Bankman-Fried, co-founder of FTX.
In addition to the case against Bankman-Fried, the SEC filed lawsuits against other major crypto players, including Binance, its CEO Changpeng Zhao, and Coinbase.
All three entities have denied any wrongdoing and have requested the dismissal of the regulator’s cases.
However, in a major blow to the commission, the agency was recently forced to withdraw its lawsuit against crypto startup DEBT Box after admitting to making inaccurate statements in court.
The SEC acknowledged in late December that it had made inaccurate statements and conceded that it had not met the expectations of accuracy and candor in court.
Prior to that, Judge Shelby criticized the agency’s lawyers and demanded an explanation for the “false or misleading” statements made by the SEC, claiming that DEBT Box was attempting to move assets offshore to evade regulatory oversight.
The post Genesis Settles SEC Lawsuit, Agrees to $21 Million Civil Penalty for Earn Product appeared first on Cryptonews.
Read More