The US Securities and Exchange Commission (SEC) has agreed to drop its enforcement case against Gemini, the cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss. The decision comes after investors in Gemini’s now-defunct Earn lending program were fully repaid their crypto assets.
Why the SEC Dropped the Case
According to a joint filing submitted on Friday in a Manhattan federal court, the SEC and Gemini confirmed that all Gemini Earn users were made whole through the Genesis Global Capital bankruptcy process. The repayments were completed between May and June 2024.
Crucially, investors received a 100% in-kind return, meaning they got back the same cryptocurrencies they originally deposited, not cash equivalents. Based on this outcome, the SEC determined that continuing the case was no longer necessary.
Background of the Gemini Earn Case
The enforcement action dates back to January 2023, when the SEC accused Gemini Trust Company and Genesis Global Capital of offering unregistered securities through the Gemini Earn program.
Under the program, Gemini users lent their crypto assets to Genesis in return for yield, with Gemini serving as the platform intermediary. At its peak, Gemini Earn held around $940 million in customer assets.
Trouble began in November 2022, when Genesis froze withdrawals amid widespread turmoil in the crypto market following the collapse of several major firms. Genesis later filed for bankruptcy, sparking lengthy negotiations involving regulators, creditors, and partners.
Unlike many companies that collapsed during the 2022 crypto downturn, Genesis ultimately returned customer assets instead of liquidating them for cash, a factor that played a decisive role in the SEC’s decision to unwind its case against Gemini.
A Broader Shift in Crypto Regulation
The dismissal also comes amid a broader softening of the SEC’s stance on digital assets under US President Donald Trump’s administration, which has signaled a more crypto-friendly regulatory approach. Trump has publicly pledged to support the mainstream adoption of digital assets and reduce regulatory pressure on the sector.
That said, the SEC made it clear in its filing that the decision does not set a precedent for other crypto-related cases and applies strictly to the specific facts surrounding Gemini.
Gemini’s Growth Continues
Following the resolution of the Earn dispute, Gemini has continued to expand its presence, particularly among institutional investors. The exchange made a high-profile debut on Nasdaq last year, reflecting renewed confidence in regulated crypto platforms as the market rebounds.
According to LSEG data, Gemini is currently valued at approximately $1.14 billion.
