In a major development in the financial industry, Genesis Global Capital LLC has agreed to a $21 million civil penalty to settle a lawsuit related to the Gemini Earn crypto lending program.
This settlement marks the end of the legal battle with the Securities and Exchange Commission (SEC) over the allegation of offering unregistered securities.
Launch of Gemini Earn for private individuals
The case came to light after Genesis and Gemini, household names in the crypto world, launched their Gemini Earn program for retail investors. The SEC, led by Chairman Gary Gensler, accused the companies of violating regulations by offering securities without required registration. Gensler emphasized the importance of complying with securities laws for investor protection and confidence in the financial markets, stating, “It is not optional. It is the law.”
The settlement follows a series of financial setbacks for Genesis, including the suspension of customer withdrawals in November 2022, when Gemini Earn had an estimated 340,000 customers and $900 million in assets under management. The $21 million fine is in addition to Gemini’s previous settlement with the New York State Department of Financial Services (NYDFS), in which Gemini agreed to a $37 million fine for compliance deficiencies.
Repay at least $1.1 billion
As part of that settlement, Gemini will refund at least $1.1 billion to customers of the Gemini Earn Program, with the option for Earn users to get back all of their cryptocurrency assets plus appreciation.
This series of settlements and fines underscores the growing attention of regulators to the crypto sector and the importance of complying with existing financial laws. With the promise of full refunds to Earn users, there appears to be a positive outcome for affected investors, despite the challenges and uncertainties the industry has faced over the past year.
Source: https://newsbit.nl/genesis-global-capital-schikt-voor-21-miljoen-met-sec-over-crypto-leningen/
