- Genesis has agreed to pay a $21 million penalty and accept a permanent injunction for selling unregistered securities in violation of SEC laws.
- SEC Chair Gary Gensler emphasizes the importance of complying with securities laws in the cryptocurrency lending industry.
- Genesis has been authorized to sell $1.6 billion of GBTC assets.
The settlement highlights Genesis’s failure to register its retail crypto lending product, which bypassed important disclosure requirements meant to protect investors. This violation has resulted in significant consequences for the company.
Following the collapse of FTX, Genesis has faced challenges such as suspending repayments, withdrawals, and new loan originations. These issues have also affected Gopax’s GoFi earn product, reflecting the wider impact of Genesis on the global cryptocurrency market.
The repercussions of Genesis’s actions have reverberated throughout the entire cryptocurrency market. As a result, the New York-based cryptocurrency exchange Gemini has agreed to refund $1.1 billion worth of digital assets to its users, specifically those affected by Genesis’s bankruptcy.
In the meantime, Genesis must obtain authorization from the U.S. Bankruptcy Court in order to move forward with its resolution. This resolution serves as a reminder of the importance of transparency and adherence to securities laws, particularly in emerging sectors like cryptocurrency lending.
