Summary
TLDR: Genesis, a bankrupt crypto lender, agreed to pay a $21 million penalty to settle SEC charges related to unregistered securities offerings. The firm froze withdrawals for the Gemini Earn program amid financial struggles triggered by the FTX collapse. Genesis will return $1.1 billion in digital assets to users and plans to sell assets to repay creditors.
Key Points
1. Genesis, a subsidiary of Digital Currency Group, has agreed to pay a $21 million civil penalty to settle charges with the SEC for engaging in the unregistered offer and sale of securities through the Gemini Earn crypto asset lending program.
2. The SEC emphasized its commitment to enforcing securities laws in the cryptocurrency market and charged Genesis with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors.
3. Genesis filed for Chapter 11 bankruptcy protection in January 2023, owed at least $3.4 billion to creditors and customers, and froze withdrawals for Gemini Earn customers in November 2022 due to a lack of sufficient liquid assets following volatility in the crypto asset market.