SEC Drops Gemini Enforcement Case After Full Repayment to Earn Investors

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, marking a significant development in U.S. crypto regulation. The decision follows the full recovery of assets by investors in Gemini’s now-defunct crypto lending program, Gemini Earn.

According to a joint stipulation filed in federal court in Manhattan on Friday, the SEC and Gemini, formally known as Gemini Space Station, moved to dismiss the lawsuit after Gemini Earn investors received a 100% in-kind return of their crypto assets. These repayments were completed through the Genesis Global Capital bankruptcy process between May and June 2024. The SEC stated that, given the complete restitution to investors, dismissal of the claims was appropriate, while emphasizing that the move does not signal a broader change in its stance on other enforcement actions.

The case dates back to 2023, when the SEC charged Genesis Global Capital and Gemini Trust Company with the illegal sale of unregistered securities. The charges stemmed from the Gemini Earn program, which allowed customers to lend their cryptocurrency to Genesis in exchange for interest payments. At its peak, the program held approximately $940 million in customer assets. In November 2022, Genesis froze withdrawals following a broader crypto market downturn, leaving hundreds of thousands of investors unable to access their funds.

Unlike several high-profile crypto collapses during the 2022 market crash, Genesis ultimately managed to return customers’ crypto assets rather than liquidating holdings and issuing partial cash repayments. This outcome played a central role in the SEC’s decision to resolve and dismiss the case.

The dismissal also comes amid a shifting regulatory climate. Under U.S. President Donald Trump, who has pledged to position himself as a “crypto president,” the SEC has adjusted its approach toward digital asset enforcement, signaling a more industry-friendly regulatory framework aimed at supporting mainstream crypto adoption.

Gemini, which did not immediately comment on the dismissal, has seen renewed momentum. The exchange made a strong Nasdaq debut last year and is currently valued at approximately $1.14 billion, according to LSEG data, reflecting growing institutional confidence in the digital asset sector.