Bankrupt cryptocurrency lender Genesis reportedly agrees to pay a $21 million civil penalty to settle with the US Securities and Exchange Commission (SEC) over the now-defunct Gemini Earn program.
According to a new report from Reuters, the settlement will allow Genesis to focus on repaying customers and creditors rather than having to defend itself against the SEC’s claims that the company sold unregistered securities through its partnership with Gemini.
However, according to the report, Genesis did not admit to any wrongdoing in agreeing to the settlement. Genesis and Gemini first teamed up in 2020 to allow Gemini customers to lend out their digital assets to earn interest.
The SEC initially sued the cryptocurrency lender in January 2023, shortly after it filed for bankruptcy, alleging that Genesis illegally sold securities to traders through the Earn program, earning billions of dollars in interest, according to the report.
Also in January 2023, Gemini announced it would sue Digital Currency Group (DCG) – Genesis’ parent company – for failing to repay hundreds of millions of dollars that were part of the Earn program.
Additionally, Genesis was fined $8 million by the New York State Department of Financial Services (DFS) in January 2024 after it was found to have inadequate cybersecurity measures in place.
Genesis plans to move forward with its plan to refund customers in cash or crypto assets, hoping its plan will be approved by the court on February 14, the report said.
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