Genesis Global Capital LLC has agreed to a $21 million settlement with the Securities and Exchange Commission (SEC).
This decision concludes a legal battle initiated by the SEC in January 2023 for Genesis and Gemini's role in marketing unregistered securities through the Gemini Earn program.
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Days prior to the settlement, a New York District Court judge rejected the crypto firms' attempts to dismiss the lawsuit and allowed the legal proceedings to continue.
The terms of the settlement dictate that the SEC's portion of the penalty will be prioritized after other bankruptcy-related payments have been disbursed, including to retail investors of the Gemini Earn program.
SEC Chair Gary Gensler emphasized the need to adhere to the established securities regulations and the significance of the settlement, stating:
Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law.
The resolution of this lawsuit comes in the wake of Gemini's agreement to a $37 million fine for compliance failures, as detailed by the New York State Department of Financial Services (NYDFS), which cited concerns over the company's operational integrity.
Moreover, as part of a settlement with the NYDFS, Gemini is committed to fully reimbursing over $1.1 billion to its Earn customers.
This settlement marks an important moment in the regulatory environment, underscoring the nuanced relationship between the cryptocurrency world and established regulatory standards.
