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The US Securities and Exchange Commission agreed on Friday to dismiss its enforcement case against Gemini, a cryptocurrency exchange founded by Tyler and Cameron Winklevoss. The move followed a full recovery of assets by investors in the Gemini Earn crypto lending program.
A joint stipulation filed in federal court in Manhattan said Earn investors received a complete, in-kind return of their crypto assets. The filing tied the repayment to the Genesis Global Capital bankruptcy process, with distributions completed between May and June 2024.
The SEC and the exchange, now known as Gemini Space Station, asked the court to dismiss the case with prejudice. That outcome means the claims cannot return to court.
The court document said the SEC viewed the “100 percent in-kind” return as the key factor behind the decision. In-kind repayment means investors received cryptocurrency back, not cash.
The SEC also said the dismissal does not signal its position in any other matter. That statement draws a clear line between this case and future disputes over crypto lending products.
The SEC charged Genesis Global Capital and Gemini Trust Company in 2023 with illegally selling securities. The agency said the firms offered the Gemini Earn program to hundreds of thousands of investors without required registration.
Gemini customers who joined Earn loaned their crypto to Genesis and received interest on those loaned assets. Genesis acted as the borrower within the structure and managed the flow of customer assets.
Genesis froze customer accounts in November 2022, and Gemini previously said Earn assets totaled $940 million at the time. The freeze followed the 2022 crypto market crash, which strained liquidity across several firms.
The SEC said Earn investors recovered their crypto through the Genesis bankruptcy process between May and June 2024. The filing said the full return reduced investor harm and made dismissal appropriate.
Genesis returned customers’ crypto assets rather than liquidating a limited pool and paying cash distributions. That approach differed from other collapses during the 2022 market downturn, which often ended in partial recoveries.
The SEC said it had decided to resolve the lawsuit last year, before the final dismissal filing. Gemini did not immediately respond to a request for comment outside regular business hours.
The SEC has shifted its approach to crypto enforcement under US President Donald Trump, who has promised to be the “crypto president.” The change has brought expectations of more favorable rules for digital asset businesses.
Genesis has settled with the SEC by paying a $21 million penalty tied to the matter. Gemini also reached an agreement with New York regulators, and one summary said the exchange paid a $37 million penalty.
The SEC said the dismissal should not be read as a broader signal on other cases, even as this chapter closes. That position leaves the agency room to pursue future actions involving yield products where investor outcomes differ.
