Genesis lawyers have proposed a 14th February hearing to settle the case with SEC. The firm intends to nominate the settlement contract as part of bankruptcy proceedings. It is important to note that Genesis Global Holdco has officially declared the settlement contract deal with the Securities and Exchange Commission valued at $21 million.
On this account, the firm filed a record at the Southern District Court of New York on 31st January. The debtors of the firm have opted to organize the next hearing on 14th February, 2024 in a bid to recognize the deal between SEC and the Firm.
In accordance with the deal, SEC is to receive $21 million in the form of penalties from Genesis regarding the matter of issuing and selling unregistered securities. The agency brought the lawsuit against the Gemini Earn Program. The court filing denotes that the settlement contract is part of extensive negotiations between SEC and GGC officials.
On this account, the settlement will extend benefits to the debtor’s estates and resolve the Civil Action Claimed brought by the SEC. The agency was also handling the Chapter 11 bankruptcy proceedings of the firm. The debtors have voted in favor of treating the settlement to remove risks, costs, and protracted litigation against the agency.
SEC, Genesis and Gemini Finalize the Settlement Contract
The settlement contract will cover all bases of a lawsuit that involved Genesis, Gemini, and SEC. The lawsuit had been in process since 2023. SEC regulators focused on the duration between February 2022 and November 2022 when the firm violated securities law via its crypto lending program as per the prosecution claims.
During the lawsuit, Genesis halted all withdrawals on its platform in November, 2022 and opted for a bankruptcy filing in January, 2023. The bankruptcy filing resulted in various new lawsuits involving Genesis, Gemini, and Genesis’s parent firm Digital Currency Group.
SEC has been embroiled in a series of lawsuits filed against a series of cryptocurrency firms and projects. Some of the firms embattled with the SEC include names like Ripple, Binance, Kraken, and Coinbase. The federal agency signed a $24 million settlement contract with Bittrex exchange and its CEO William Shihara for making profits through an unregistered crypto trading platform.
Genesis Global Trading signed a penalty slip of $8 million on 12th January, 2024 issued by the New York Department of Financial Services. As a result of the deal, the firm has agreed to halt operations in New York and revoke BitLicense.
Genesis Files Petition to Sell $1 Billion in Trust Assets
Genesis Global Capital has filed a petition at the Bankruptcy Court to approve the sales of its shareholdings. The bankrupt firm is seeking to liquidate Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETGC) which have an aggregate value of $1.6 billion.
The firm has also highlighted the urgency of the petition to prevent any price fluctuations. GBTC shares account for 87% of Genesis’s portfolio that is distributed among three trustees and have a total valuation of $1.38 billion.
After the approval from the SEC, GBTC shareholders were able to redeem shares once the trust was converted into a spot Bitcoin ETF. However, the ETH trust did not have a redemption option and required written consent from the sponsor to sell shares. Genesis has added in the court filings that this written approval should be removed. Another defunct platform FTX sold 22 million in GBTC shares valued at $1 billion to liquidate its entire share holdings.