Bankrupt Crypto Lender Genesis Consents to $21M SEC Settlement Over Gemini Earn Controversy

By: Eva Baxter

The insolvent crypto lending firm, Genesis Global, has agreed to a $21 million civil fine related to the now-defunct Gemini Earn lending initiative. This resolution came after a settlement initially agreed upon in January and signifies the conclusion of the U.S. SEC's lawsuit against the company.

The SEC will not collect the penalty until all bankruptcy claims with Genesis are settled, including those from Gemini Earn investors. This allows Genesis to shift its focus onto its ongoing bankruptcy proceedings. Notably, this settlement comes after a U.S. Court upheld the SEC's argument that both the lender and the Gemini crypto exchange violated securities laws.

In a previous update, the crypto exchange Gemini, led by the Winklevoss twins, assured its Earn users they would receive '100% of their digital assets back'. In addition, Gemini also disclosed a settlement agreement with the New York State Department of Financial Services. As per the terms, Gemini commits to returning a minimum of $1.1 billion to customers enrolled in its Earn Program.

SEC Chairman Gary Gensler emphasized that this case highlights the importance of crypto lending platforms and other intermediaries complying with the country's securities laws as it promotes trust in markets and protects investors.