Genesis reaches settlement agreement with SEC, required to pay $21 million civil penalty

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Genesis Settles with SEC for $21 Million

According to Bloomberg, Genesis Global Holdco, LLC, the parent company of the digital currency group DCG's institutional lending platform Genesis Global Capital, has reached a settlement agreement with the SEC to end a civil lawsuit, with Genesis required to pay a $21 million civil penalty.

The good news is that, as per documents filed with the New York bankruptcy court on Wednesday, Genesis will only need to pay the penalty to the SEC if it fully repays its users and other creditors in accordance with Chapter 11 bankruptcy rules.

This agreement is still subject to approval by the bankruptcy judge.

In court documents, Genesis stated:

The settlement agreement avoids further litigation with the SEC, saving cash. We are attempting to return as much cash as possible to creditors, and the debt repayment plan is pending approval. Continuing to litigate would significantly distract Genesis and its advisors.

Timeline of Genesis Institutional Lending Platform｜From Public Assurance of Safety to the Brink of Bankruptcy

Genesis' Series of Lies

After mid-2022, a series of lending platforms including BlockFi, Celsius, and Genesis went bankrupt one after another, all previously reassuring the safety of their assets, with FTX doing the same.

Genesis ultimately filed for bankruptcy reorganization in January 2023.

DCG Crisis! Genesis Affiliate Companies File for Bankruptcy Protection, Will DCG Bonds Be Redeemed?

At the time, Genesis' operation of Gemini Earn with Gemini Trust Co led to mutual accusations after Genesis faced a funding shortfall, ultimately resulting in SEC accusing them of issuing unregistered securities.

Genesis and Gemini denied any wrongdoing, arguing that Gemini Earn was not a security. According to legal documents, the program has been terminated.

Key Case of Yield Products! SEC Accuses Genesis and Gemini of Selling Unregistered Securities, Leading to Class Action Lawsuits