Bankrupt crypto lender Genesis is reportedly agreeing to pay a $21 million civil fine to settle with the U.S. Securities and Exchange Commission (SEC) over the now-defunct Gemini Earn program.
According to a new report by Reuters, the settlement will allow Genesis to focus on repaying customers and creditors instead of having to defend itself against the SEC’s claims that the firm was selling unregistered securities through its partnership with Gemini.
However, Genesis did not admit to any wrongdoings by agreeing to the settlement, according to the report. Genesis and Gemini first collaborated in 2020 to allow Gemini customers to loan out their digital assets as a means of earning interest.
The SEC initially sued the crypto lender in January 2023 shortly after it filed for bankruptcy, claiming that Genesis illicitly sold securities to traders through the Earn program, earning billions of dollars of interest in the process, according to the report.
Also in January 2023, Gemini announced that it would be suing the Digital Currency Group (DCG) – the parent company of Genesis – for failing to pay back hundreds of millions of dollars that were a part of the Earn program.
Furthermore, in January of 2024, Genesis was hit with an $8 million fine by the New York State Department of Financial Services (DFS) after it was found to have inadequate cybersecurity measures.
Genesis is slated to move ahead with its plan of repaying customers in cash or crypto assets, hoping to have its plan approved by the court on February 14th, according to the report.
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