Genesis Global Resolves SEC Lawsuit with $21M Settlement

Bankrupt Genesis Global Holdco has settled the lawsuit filed by the Securities and Exchange Commission (SEC) a year ago concerning a lending program.

According to a filing in the U.S. Bankruptcy Court in the Southern District of New York, Genesis, a subsidiary of the Digital Currency Group, agreed to pay $21 million to the SEC to resolve that litigation. 

The filing dated January 31 states that the SEC and GGC engaged in lengthy negotiations that resulted in the Settlement Agreement.

Further, the filling said, “The proposed settlement will, among other benefits to the Debtors’ estates, resolve the Civil Action Claim filed by the SEC in these Chapter 11 Cases and eliminate the risks, expenses, and uncertainty associated with protracted litigation against the SEC.”

According to the court petition, “payment in full of all other allowed administrative expenses, secured, priority, and general unsecured claims” will come before the $21 million is disbursed. 

The settlement concludes a civil action initiated against Gemini and Genesis a year ago. The SEC had accused Genesis Global Capital and Gemini Trust Company of conducting an unregistered offer and sale of securities to retail investors through a Gemini crypto lending program.

After suffering financial setbacks as a result of the collapses of cryptocurrency exchange FTX and hedge fund Three Arrows Capital in 2022, Genesis Global Holdco filed for bankruptcy protection in January of 2022. 

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2024-02-01 23:00