Genesis to Pay $21 Million, Settle SEC Charges of Unregistered Offer and Sale of Securities

Genesis Agrees to Pay $21 Million Penalty to Settle SEC Charges

The Securities and Exchange Commission today announced that Genesis Global Capital, LLC agreed to a final judgment ordering it to pay a $21 million civil penalty and imposing a permanent injunction to settle charges that it engaged in the unregistered offer and sale of securities through a crypto asset lending program known as the Gemini Earn program. Under the terms of the settlement, the SEC will not receive any portion of the penalty until after payment of all other allowed claims by the bankruptcy court, including claims by retail investors in the Gemini Earn program.

Sam Bankman-Fried Says 50-Year Sentence Only Suitable for a ‘Super Villain’

Sam Bankman-Fried said US prosecutors’ proposal to put him in prison for as long as 50 years “distorts reality” and paints him as a “depraved super-villain.”

Prosecutors have argued that a sentence ranging from 40 to 50 years is necessary for the FTX co-founder’s “historic” crime involving more than 1 million victims and losses of more than $10 billion in the collapse of his crypto empire.

The Manhattan US attorney argued to the judge who will sentence Bankman-Fried on March 28 that he showed “unmatched greed and hubris” and broke the law based on a “pernicious megalomania guided by the defendant’s own values and sense of superiority.” The government’s request is far less than the 100 years recommended in US criminal sentencing guidelines, but much more than the 6 1/2-years Bankman-Fried’s lawyers suggested.

SEC’s ‘Gag Order’ Policy Survives Challenge at Fifth Circuit

The Securities and Exchange Commission’s policy of silencing defendants who settle with the agency withstood a challenge from a Texas financial planner, although a federal appeals court avoided his constitutional arguments.

The US Court of Appeals for the Fifth Circuit on Tuesday upheld a lower court ruling that found Christopher Novinger’s challenge to the SEC’s longstanding “no admit, no deny” policy was procedurally improper.

A unanimous three-judge panel for the court found that the district court hadn’t issued a final order in Novinger’s bid to alter the terms of his SEC consent order, and as a result the Fifth Circuit didn’t have jurisdiction over the case.

Coinbase’s Allies Join Crypto Firm’s Case Against U.S. SEC

Several allies joined Coinbase Inc. (COIN) in its court fight against the U.S. Securities and Exchange Commission (SEC) to force the agency to rethink its refusal to write specific rules to govern the crypto industry, with Paradigm, the Crypto Council for Innovation and others filing outside arguments with the circuit court.

A lawyer for Paradigm argued in a friend-of-the-court filing on Monday that the SEC is trying to treat crypto as if it comes from the old financial system the agency is accustomed to, in which a firm issues a security and should be responsible for informing the public about it. That’s not a simple task for a crypto project that doesn’t have a base of operations, a dedicated staff or a central source of management, the crypto investment firm contended.