Genesis Global Capital has agreed to pay a $21 million fine and accept a permanent injunction to settle the SEC’s allegations. The SEC filing on March 19 revealed that Genesis will be accused of offering and selling securities without proper registration. The settlement pertains to the company’s involvement in the Gemini Earn program, a crypto-asset lending initiative.

SEC Chair Gary Gensler emphasized the importance of enforcing securities laws in the crypto industry. He highlighted the risks that investors face when market participants do not comply with federal regulations. Gensler stressed that investor protection disclosures mandated by federal securities laws are crucial and cannot be replaced by hype or advertising.

In a recent development, U.S. Federal Judge Edgardo Ramos denied a motion to dismiss the SEC’s lawsuit against the Gemini Earn program. The judge alleged that Gemini and Genesis sold unregistered securities to investors. He also revealed that at the time when fund withdrawals from Gemini Earn were halted, 340,000 users were active in the program, with Genesis holding $900 million of client funds on the platform.

Following these legal proceedings, Gemini and Genesis reached a settlement in principle on February 28. Once approved by the bankruptcy court, Earn users will be able to recover their funds in full. This agreement is a positive step towards resolving the issues surrounding the Genesis Bankruptcy and ensuring that all users receive their digital assets back.

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