Genesis Global Capital LLC has reached a significant milestone in its legal battle with the Securities and Exchange Commission (SEC) by agreeing to a $21 million settlement. The settlement stems from allegations of marketing unregistered securities through the Gemini Earn program, a joint venture between Genesis and Gemini.
The SEC’s focus on bringing crypto platforms under traditional securities laws for enhanced investor protection is evident in this resolution. The settlement follows a series of legal and financial challenges for both Genesis and Gemini, culminating in a New York District Court judge’s rejection of their attempts to dismiss the lawsuit.
Under the terms of the settlement, the SEC’s portion of the penalty will be prioritized after other bankruptcy-related payments, including disbursements to retail investors of the Gemini Earn program. SEC Chair Gary Gensler emphasized the importance of adhering to securities regulations, stating that it is not optional but a legal requirement to protect investors and promote trust in markets.
This settlement comes on the heels of Gemini’s agreement to a $37 million fine for compliance failures, as outlined by the New York State Department of Financial Services. Gemini has committed to fully reimbursing over $1.1 billion to its Earn customers as part of the settlement with the NYDFS.
The resolution of this lawsuit marks a crucial moment in the regulatory landscape, highlighting the complex relationship between the cryptocurrency industry and established regulatory standards. It underscores the need for compliance and accountability in the evolving crypto space.
