Genesis agrees to $21 million penalty, with bankruptcy claims to be paid first
Quick Take Genesis Global Capital agreed to pay a $21 million civil penalty as part of a settlement over SEC charges. Payment to the SEC will only follow the payment of all allowed claims by the bankruptcy court.
Genesis Global Capital agreed to pay a $21 million civil penalty as part of a settlement over charges it engaged in the unregistered offer and sale of securities through Gemini Earn.
A permanent injunction has been imposed, according to a press release from the United States Securities and Exchange Commission.
Payment to the SEC will only follow the payment of all allowed claims by the bankruptcy court. As noted by the agency, this includes retail investors from Gemini Earn.
“We charged Genesis with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors,” SEC Chair Gary Gensler stated. “Today’s settlement builds on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws."
"Doing so best protects investors," he added. "It promotes trust in markets. It’s not optional. It’s the law.”
The SEC's Division of Enforcement director, Gurbir S. Grewal, also weighed in, saying, “The collapse of the Gemini Earn program underscores the unknown risks that investors are exposed to when market participants fail to comply with the federal securities laws."
"As this enforcement action makes clear, no amount of hype and advertising can substitute for the investor-protection disclosures required by the federal securities laws," they added.
The SEC charged Genesis and Gemini Trust Company on January 12, 2023. Central to the complaint was the Gemini Earn program, which allowed retail investors to loan their crypto assets to Genesis in exchange for the company's promise to pay interest earned on the loaned assets.
Gemini Earn investors could not withdraw their crypto assets as of November 2022 due to a lack of liquidity from Genesis — which filed for voluntary Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York on January 19, 2023.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
XLM, UNI and AAVE gain double-digits as BTC reclaims $94k
Bitcoin’s metrics suggest bull market is far from overvalued
Jim Cramer, Known for His Wrong Comments, Shared His Last Opinion on Bitcoin and Cryptocurrencies
Jim Cramer, who is the butt of jokes in the cryptocurrency world with his predictions, has made new comments about Bitcoin. Here is everything he said.