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Key Takeaways
- Genesis Global Capital LLC agrees to a $21 million settlement with the SEC over unregistered securities charges linked to the Gemini Earn program.
- The settlement emphasizes the SEC’s focus on bringing crypto platforms under the purview of traditional securities laws for enhanced investor protection.
- The resolution follows a series of legal and financial challenges for Genesis and Gemini.
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.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
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