Genesis Global Capital has been ordered to pay a $21Million civil fine to settle Securities and Exchange Commission (SEC) charges. The fine relates to illegal security activities.
Genesis’ crypto lending program sold securities to its investors without registering them – the SEC claimed on March 19. In January 2023, the SEC formally charged Genesis.
Genesis Global Capital Fine
As a branch of the Digital Currency Group, Genesis Global Capital struck a deal with Gemini. The idea of the partnership was to to offer Gemini customers the chance to loan their crypto assets to Genesis.
In exchange, they would earn extensive interest. Two months into the deal, the SEC said that Genesis raised billions of dollars’ worth of crypto assets from the investors. Cases like this are not unfamiliar to the SEC.
Firms such as Genesis have often violated security laws through the offer and sale of crypto assets. The fine itself of $21m has been accepted by Genesis.
In January 2023, Genesis filed for bankruptcy but the SEC will not receive any of the penalty until other claims are settled by the court. This could take months or even go on until 2025.
Who Are The Securities And Exchange Commission?
Founded in June 1934, the Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. They were formed after the Wall Street Cash in 1929.
The SEC’s main purpose is to enforce the law against market manipulation and abuse. Furthermore they abide by a three part mission. The primary focus is to protect investors.
Maintaining fair, orderly, and efficient markets is the second with facilitating capital formation the third. The current chair is former Goldman Sachs investment banker Gary Gensler, who was appointed in April 2021.
In June 2023, the SEC also filed 13 charges against Binance founder and former CEO Changpeng Zhao. Coinbase also faced similar charges relating to illegal security activities.
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