MultiversX Tracker is Live!

SEC Hits Genesis with $21 Million Penalty over Unregistered Crypto Lending Program

Finance Magnates

Cryptocoins News / Finance Magnates 23 Views

Genesis Global Capital, LLC has agreed to a $21 million penalty to settle charges brought against the firm by the Securities and Exchange Commission (SEC). This matter involves allegations by the regulator that the crypto lending platform offered unregistered securities to the public.

The SEC accused Genesis of failing to register the Gemini Earn program, a crypto lending product jointly managed with the cryptocurrency exchange Gemini. The regulator maintains that the offering breached the disclosure requirements designed to safeguard investors.

Unregistered Lending Program

The SEC's Chair, Gary Gensler, mentioned: "We 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."

"Today's settlement builds on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets. It's not optional. It's the law."

Genesis' involvement in the Gemini Earn program, which promised interest payments on crypto assets loaned to the company, attracted substantial attention until its collapse in November 2022.

Genesis and Gemini Trust Company, LLC were charged by the SEC on January 12, 2023. Subsequently, Genesis filed for bankruptcy following the collapse of the Gemini Earn program, leaving investors unable to access their assets. The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, resulted in Genesis consenting to a final judgment, including the $21 million civil penalty and a permanent injunction.

Regulatory Response

Last month, Genesis settled fraud charges brought against the firm by the New York Attorney General, Letitia James. These allegations resulted from the Gemini Earn program, which purportedly defrauded $1.1 billion worth of customers' funds.

According to James, the Gemini Earn program misled customers and concealed significant financial losses. As part of the settlement, assets designated for the state regulator were redirected to Gemini Earn’s former customers and other creditors of Genesis.

Earlier, Genesis Global Capital’s sister unit, Genesis Global Trading, settled with the New York State Department of Financial Services, paying hefty penalties for compliance failures. Moreover, the company surrendered its BitLicense, which is essential for offering crypto services in New York.

This article was written by Jared Kirui at www.financemagnates.com.
Get BONUS $200 for FREE!

You can get bonuses upto $100 FREE BONUS when you:
πŸ’° Install these recommended apps:
πŸ’² SocialGood - 100% Crypto Back on Everyday Shopping
πŸ’² xPortal - The DeFi For The Next Billion
πŸ’² CryptoTab Browser - Lightweight, fast, and ready to mine!
πŸ’° Register on these recommended exchanges:
🟑 Binance🟑 Bitfinex🟑 Bitmart🟑 Bittrex🟑 Bitget
🟑 CoinEx🟑 Crypto.com🟑 Gate.io🟑 Huobi🟑 Kucoin.



Comments