![]() Judge Lane also stressed the need for urgency and that time is not on anyone’s side. This is an improvement over the 60-day extension that Genesis requested, and the hearing was a good opportunity for Judge Lane to hear Genesis’s creditors’ dissatisfaction with the DCG “agreement in principle” announced last week. Following a lengthy hearing on Genesis’s exclusivity motion on September 6th, Judge Lane granted Genesis a 30-day extension of its exclusive period to file and solicit a plan of reorganization, over the objections of Gemini, the Ad Hoc Group of Creditors (AHG), and the Fair Deal Group (FDG). The European Banking Authority (EBA) has recently published its peer review on authorisation of payment institutions and e-money under the revised PSD2.It was another busy week in the Genesis bankruptcy. Our investigations in this space are very much active and ongoing and we encourage anyone with information about this matter or other possible securities law violations to come forward, including under our Whistleblower Program if applicable.” “As we’ve seen time and again, the failure to do so denies investors the basic information they need to make informed investment decisions. Gurbir Grewal director of the SEC’s Division of Enforcement said, “The recent collapse of crypto asset lending programs and the suspension of Genesis’ program underscore the critical need for platforms offering securities to retail investors to comply with the federal securities laws. “Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. ![]() SEC chair Gary Gensler said, “We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors. The SEC’s complaint alleges that the Gemini Earn program constitutes an offer and sale of securities under applicable law and should have been registered with the Commission. As of today, the Gemini Earn retail investors have still not been able to withdraw their crypto assets. Gemini terminated the Gemini Earn program earlier this month. ![]() The complaint further alleges that, in November 2022, Genesis announced that it would not allow its Gemini Earn investors to withdraw their crypto assets because Genesis lacked sufficient liquid assets to meet withdrawal requests following volatility in the crypto asset market.Īt the time, Genesis held approximately $900m in investor assets from 340,000 Gemini Earn investors. As alleged in the complaint, Genesis then exercised its discretion in how to use investors’ crypto assets to generate revenue and pay interest to Gemini Earn investors. ![]() Gemini deducted an agent fee, sometimes as high as 4.29 percent, from the returns Genesis paid to Gemini Earn investors. In December 2020, Genesis entered into an agreement with Gemini to offer Gemini customers, including retail investors in the US, an opportunity to loan their crypto assets to Genesis in exchange for Genesis’ promise to pay interest.īeginning in February 2021, Genesis and Gemini began offering the Gemini Earn program to retail investors, whereby Gemini Earn investors tendered their crypto assets to Genesis, with Gemini acting as the agent to facilitate the transaction. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing. The SEC has charged Genesis and Gemini for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program.Īccording to SEC, through this unregistered offering, Genesis and Gemini raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors. ![]()
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