SEC Drops Civil Action Over Gemini's Lending Program

The SEC was satisfied with Gemini’s agreement to contribute $40 million toward the full recovery of Gemini Earn investors’ assets lost as a result of the Genesis bankruptcy.

The US Securities and Exchange Commission’s civil lawsuit against Gemini Trust Company and Genesis Global Capital in the Earn-related unregistered securities case has been dismissed with prejudice.

Court filings show the parties submitted a joint stipulation to dismiss the action on Friday in the US District Court in the Southern District of New York, effectively ending the SEC’s claim over Gemini’s crypto lending program with Genesis.

A federal judge still needs to sign off on the joint stipulation to dismiss.

The dismissal comes about nine months after the SEC paused the civil action in April 2024 when then-acting chairman Mark Uyeda was leading the agency.

The SEC was content with the dismissal based on a 100% in-kind return of Gemini Earn investors’ crypto assets through the Genesis bankruptcy case in mid-2024 and Gemini agreeing to contribute up to $40 million to help fund the full return of those crypto assets.

It also noted that Genesis already settled with the SEC by agreeing to pay a $21 million fine.

Extract of the SEC’s joint stipulation to dismiss the case involving Gemini and Genesis. Source: CourtListener

The SEC brought the case against the Winklevoss-led Gemini and Genesis in January 2023, during the Biden administration, when crypto-related lawsuits and investigations surged as part of a broader regulatory crackdown on the industry.