(Reuters) – Genesis Global Capital LLC has agreed to pay a $21 million civil fine to settle charges that it illegally sold securities through its cryptocurrency lending program without registering them, the U.S. Securities and Exchange Commission said on Tuesday.
The deal resolves charges brought by the SEC in January 2023 against Genesis and Gemini Trust Company LLC over their joint cryptocurrency lending program. It was one of a series of enforcement actions taken by the SEC against large companies in the cryptocurrency sector.
Genesis, which filed for bankruptcy in January 2023, is part of the Digital Currency Group (DCG). A DCG spokesperson did not immediately respond to a request for comment.
The SEC said Genesis operated a lending program that raised billions of dollars worth of cryptocurrency assets from investors. It froze customer redemptions in November 2022, after the collapse of cryptocurrency exchange FTX.
Through a fee settlement deal detailed Tuesday, the SEC said it would not receive any of the penalties until other claims are settled by the bankruptcy court, including those from individual investors.
(Reporting by Chris Prentice; Additional reporting by Hannah Lange and Susan Heavey; Editing by Alexander Smith)
