According to breaking information, Genesis, the bankrupt cryptocurrency company that has been on the agenda of the cryptocurrency world for a while, reached an agreement with the SEC regarding its Earn product.
Genesis, a subsidiary of Digital Currency Group, agreed to pay $21 million in damages to the U.S. Securities and Exchange Commission to settle the case.
But the company will have to pay that penalty only if it can fully repay customers and other creditors in Chapter 11, according to documents filed in New York bankruptcy court on Wednesday.
The settlement, which must be approved by a bankruptcy judge, resolves allegations that Genesis illegally raised money from investors through its Gemini Earn program, which it operates in partnership with Gemini.
The joint venture allowed customers to collect interest payments by lending their digital assets, which the SEC claimed amounted to an unregistered securities offering.
Genesis said in court documents that the deal would save cash by avoiding further litigation with the SEC.
The company said continuing to defend against the lawsuit would also be a significant distraction for Genesis and its advisers, who are trying to return as much cash as possible to creditors and win court approval of its debt repayment plan.
*This is not investment advice.
