Bankrupt Genesis settles SEC lawsuit over Gemini Earn program

Quick Take

  • Genesis, which is a subsidiary of the Digital Currency Group, agreed to pay $21 million to the SEC, according to a filing in the U.S. Bankruptcy Court in the Southern District of New York. 

Bankrupt Genesis Global Holdco has agreed to settle a lawsuit brought by the Securities and Exchange Commission a year ago over a lending program. 

Genesis, which is a subsidiary of the Digital Currency Group, agreed to pay $21 million to the SEC to end that lawsuit, according to a filing in the U.S. Bankruptcy Court in the Southern District of New York. 

"The Settlement Agreement is the product of extensive negotiations between the SEC and GGC," according to the filing dated Jan. 31. "The proposed settlement will, among other benefits to the Debtors’ estates, resolve the Civil Action Claim filed by the SEC in these Chapter 11 Cases and eliminate the risks, expenses, and uncertainty associated with protracted litigation against the SEC."

The $21 million will be paid after "payment in full of all other allowed administrative expense, secured, priority and general unsecured claims," according to the court filing. 

The SEC's suit 

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The settlement resolves a civil action brought against both Gemini and Genesis a year ago. The SEC had charged Genesis Global Capital and Gemini Trust Company for the unregistered offer and sale of securities to retail investors through a Gemini crypto lending program. 

Genesis Global Holdco filed for bankruptcy protection in January 2022 after taking a financial hit following the collapses of crypto hedge fund Three Arrows Capital and crypto exchange FTX in 2022. 

Digital Currency Group did not immediately respond to a request for comment. The SEC declined to comment. 


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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

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