SEC drops crypto lending case against Gemini
The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its enforcement case against Gemini, the cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss, after investors in the company’s crypto lending program recovered their assets in full.
According to court filings in Manhattan, the SEC and Gemini Space Station Inc. jointly stipulated to dismiss the lawsuit, citing the complete return of crypto assets to Gemini Earn investors through the Genesis Global Capital bankruptcy process between May and June 2024. Regulators said the full in-kind repayment of customer assets made continued litigation unnecessary, News.Az reports, citing Reuters.
The case dates back to 2023, when the SEC charged Genesis Global Capital and Gemini Trust Company with illegally offering unregistered securities through the Gemini Earn program. Under the scheme, Gemini customers loaned their cryptocurrency to Genesis in exchange for interest payments. The program held approximately $940 million in customer assets when Genesis froze withdrawals in November 2022 following the broader crypto market crash.
Unlike several crypto firms that collapsed during the 2022 downturn, Genesis ultimately returned customer assets in cryptocurrency rather than liquidating holdings and repaying investors in cash. The SEC said this full recovery was a key factor behind its decision to drop claims against Gemini, while noting that the dismissal does not signal any broader shift in its stance on other crypto enforcement actions.
The move comes as U.S. crypto regulation enters a new phase under President Donald Trump, who has pledged to support digital asset adoption and introduce more industry-friendly rules. Observers say this evolving regulatory climate is reshaping how authorities approach enforcement actions involving major crypto firms.
Gemini has not yet commented publicly on the dismissal. The exchange, which made a strong Nasdaq debut last year, is currently valued at about $1.14 billion, reflecting renewed institutional confidence in digital asset markets.
By Aysel Mammadzada
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