Failed cryptocurrency lender Genesis has agreed to pay $21 million to settle a 2023 federal lawsuit alleging the cryptocurrency company robbed it of unregistered securities.
Genesis will pay cash to settle with the Securities and Exchange Commission, according to documents filed Wednesday in the U.S. Bankruptcy Court for the Southern District of New York.
In January last year, the SEC hit Genesis filed the lawsuit, alleging that the company raised billions of dollars worth of cryptocurrency from hundreds of thousands of investors through unregistered securities offerings.
“The SEC’s complaint in the civil action alleges that between February 2021 and November 2022, GGC and Gemini Trust Company, LLC engaged in unregistered offers and sales of securities to U.S. retail investors as part of an investment opportunity called the Gemini Earn Program. They claim that they did. ” Wednesday’s filing said.
It added that under the settlement, “the SEC will receive permitted general unsecured claims against GGC in the amount of $21 million.” Genesis plans to pay the amount in cash to the SEC once creditors who previously used the service are repaid.
Genesis, a subsidiary of Digital Currency Group (DCG), was one of many cryptocurrency companies hit hard by the collapse of FTX. that contaminated The exposure to the bankruptcy was revealed shortly after the SEC’s lawsuit. folded Cryptocurrency venture fund Three Arrows Capital.
Genesis has worked as Gemini’s primary partner for its Earn program, which allows users to earn up to 8% interest on their cryptocurrencies. However, it suffered from the collapse of cryptocurrency mega brand FTX and eventually freeze Customer withdrawal.
Creditors have been waiting for their money ever since. DCG said creditors would be made whole.
Edited by Ryan Ozawa.
