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Genesis Global Holdco, currently undergoing bankruptcy, has settled a lawsuit filed by the Securities and Exchange Commission (SEC) over a contentious lending program.
As part of the agreement, Genesis, a subsidiary of Digital Currency Group, will pay $21 million to the SEC, as revealed in a recent U.S. Bankruptcy Court filing in the Southern District of New York, Bloomberg reported.
The court document dated Jan. 31 details the settlement as a result of "extensive negotiations" between the SEC and Genesis Global Holdco (GGC).
"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," the filing stated.
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This payment of $21 million is stipulated to occur after the full settlement of all other prioritized claims, including administrative expenses and secured priority, and general unsecured claims, as per the court's directive.
The lawsuit in question was initiated a year ago against both Gemini and Genesis.
The SEC had accused Genesis Global Capital and Gemini Trust Company of engaging in the unregistered offer and sale of securities to retail investors through a Gemini cryptocurrency lending program.
Genesis Global Holdco's path to bankruptcy began in January 2022, following substantial financial losses triggered by the collapses of cryptocurrency hedge fund Three Arrows Capital and the cryptocurrency exchange FTX (CRYPTO: FTT) in 2022.
This settlement marks a significant step in addressing the legal challenges faced by Genesis amid its ongoing bankruptcy proceedings.
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Posted In: $FTT
