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
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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