Genesis Global Capital has reached an agreement to pay a $21 million civil penalty in order to settle charges related to the Gemini Earn lending program. The charges were brought against Genesis and Gemini for conducting an unregistered securities offering when they launched the program for retail investors. The settlement, announced by Gary Gensler, the chair of the United States Securities and Exchange Commission (SEC), states that the SEC will only receive a portion of the penalty after other bankruptcy payments have been made, including claims by retail investors. This $21 million fine brings an end to the lawsuit initiated by the SEC against Gemini and Genesis in January 2023 for selling unregistered securities through the Gemini Earn program. In November 2022, Genesis suspended user withdrawals on its platform when Gemini Earn had approximately 340,000 customers and $900 million in assets under management. In a separate case, Gemini recently agreed to pay a $37 million penalty for multiple compliance failures, according to Superintendent Adrienne Harris of the New York State Department of Financial Services (NYDFS). As part of the settlement with the NYDFS, Gemini will return at least $1.1 billion to customers of the Gemini Earn program through the Genesis bankruptcy proceeding. If approved by the bankruptcy court, Gemini has stated that it expects Earn users to receive 100% of their cryptocurrency assets back, along with any appreciation.
Genesis settles SEC case for $21M payment