Bankrupt Crypto Lender Genesis to Pay $21M to Settle SEC Charges

Genesis Global Capital LLC has agreed to pay a $21 million civil fine to settle charges that it illegally sold securities through its crypto lending program without registering them, the U.S. Securities and Exchange Commission said on Tuesday.

The deal resolves January 2023 charges the SEC filed against Genesis and Gemini Trust Company LLC over their joint crypto lending program. It was one of a spate of enforcement actions the SEC has taken against large firms in the crypto sector.

Genesis, which filed for bankruptcy in January 2023, is part of Digital Currency Group (DCG). A spokesperson for DCG did not respond immediately to request for comment.

Related: New York Attorney General Triples Size of Crypto Fraud Lawsuit to $3 Billion

Genesis operated a lending program that raised billions of dollars’ worth of crypto assets from investors, the SEC has said. It froze customer redemptions in November 2022, following the collapse of crypto exchange FTX.

Through the deal to settle the charges detailed on Tuesday, the SEC said it will not receive any of the penalty until other claims are settled by a bankruptcy court, including those from retail investors.