Genesis to Pay $21M SEC Penalty in Settlement Over Gemini Earn Product

Bankrupt crypto lender Genesis Global Capital has agreed to a final judgment requiring it to pay a $21 million penalty to settle charges brought by the U.S. Securities and Exchange Commission (SEC) for violating securities laws related to the now-defunct Gemini Earn program, the SEC announced on Tuesday.

The settlement follows a recent decision by a New York judge to deny motions by Genesis and cryptocurrency exchange Gemini to halt the SEC case filed in January 2023. Genesis and two affiliates had filed for bankruptcy shortly after the SEC filed charges against them.

In February 2024, Genesis disclosed in court documents that it had reached a settlement agreement with the SEC for $21 million, and it seems that the agreement has now been finalized.

Importantly, the SEC will not receive any portion of the penalty until after all other allowed claims by the bankruptcy court have been paid, according to the announcement.

SEC Chair Gary Gensler stated, “Today’s settlement builds on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws.”