Genesis agrees $21m SEC settlement in Gemini Earn lawsuit
The SEC’s civil lawsuit against Barry Silbert-backed Genesis has ended in a mutual settlement amid bankruptcy proceedings for the defunct crypto service provider.
Genesis Global Holdco, a Digital Currency Group (DCG) subsidiary, will pay $21 million in penalties in a lawsuit claiming the company broke securities laws during its lending program in conjunction with crypto exchange Gemini.
According to court filings from a Southern District of New York bankruptcy court, terms of the settlement with the U.S. Securities and Exchange Commission (SEC) allow Genesis to pay its fine after secured and unsecured claims have been dealt with.
The document dated Jan. 31 explained that this settlement was born out of extensive negotiations between Genesis and the SEC, which will benefit the debtors’ estates by removing risks attached to a prolonged lawsuit.
Last year, the SEC sued Genesis and Gemini for allegedly offering unregistered securities to retail investors via Gemini’s Earn product. This arrived amid tensions between the two firms as Gemini declared fraud by the crypto lender, its parent company DCG, and Silbert.
The companies were centerpieces to many lawsuits after Sam Bankman-Fried’s crypto exchange FTX collapsed, revealing a labyrinth of questionable business deals and operations.
Genesis has also settled litigation against DCG and cases with New York’s Department of Financial Services. New York regulators sued the company, Gemini, and Silbert’s DCG for $1 billion, alleging fraud and criminal misconduct.
The company agreed to forfeit its New York BitLicense, cease all business in the state, and pay $8 million in fines.
