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On January 31, 2024, bankrupt Genesis Global Holdco, LLC, on behalf of its subsidiary Genesis Global Capital, LLC1 asked the United States Bankruptcy Court for the Southern District of New York to approve a settlement reached with the SEC to end the SEC’s enforcement action against Genesis for the unregistered offer and sale of securities through the Gemini Earn program.

Under the terms of the proposed judgment, Genesis has agreed to pay a civil penalty in the amount of $21 million, subordinated behind all administrative, priority, secured, and general unsecured claims, meaning, among other things, the SEC will be paid only if all investor claims are satisfied. The proposed judgment also includes an obey the law injunction.

According to papers filed in support of Genesis’ request for the Court’s approval, the special committee of the company’s board of directors concluded it would not be in the best interest of the debtors’ estates to continue to incur litigation costs to defend itself against claims related to the now terminated Earn program.


The SEC filed its complaint against Genesis on January 12, 2023. We shared our observations on that suit here.

We here at SKrypto really don’t have anything very clever to say, except it seems like bankruptcy court may be where a lot of the SEC’s crypto enforcement actions will breathe their final breath.


1 In addition to Genesis Global Capital, LLC, the SEC’s complaint charged Gemini Trust Company, LLC, owned and controlled by Cameron and Tyler Winklevoss, who founded it in 2014 and continue to fight the SEC’s action.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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Philip Moustakis | Partner

A former senior counsel in the SEC’s Division of Enforcement, Philip advises companies and individuals at Seward & Kissel on cryptocurrencies and blockchain technology, SEC enforcement matters, other regulatory investigations, and internal investigations. As a founding member of the SEC’s Cyber Unit, Philip advised the Commission on cryptocurrencies and investigated matters involving initial coin offerings (ICOs), unlawful touting of ICOs, and other violations of the federal securities laws related to cryptocurrencies. Publicly filed enforcement matters Philip spearheaded included the SEC’s first ever Bitcoin-related enforcement action against the operator of Bitcoin Savings & Trust, a Bitcoin-denominated Ponzi scheme, settled proceedings against an operator of a Bitcoin-related social media marketing venture and a popular Bitcoin betting site for the offer and sale of unregistered securities, and settled proceedings against an operator of unregistered cryptocurrency-denominated securities exchanges and broker-dealers.

“The SEC is a principles based regulator, and it will assert its jurisdiction over any securities offering or transaction, as it has done since the onset of the ICO craze, regardless of the technology used to facilitate such an offering.”

Philip’s thoughts on the recent SEC enforcement action against Kik Interactive, Inc. as published in the Crowdfund Insider article “Former SEC Senior Counsel Comments on Kik Ruling: Kik Could Have Benefited From Traditional Capital Markets Lawyer"