The
Securities and Exchange Commission (SEC) and Gemini Trust have reached an
agreement to resolve a lawsuit over the cryptocurrency exchange’s Gemini Earn
lending program that froze $900 million in customer funds.
Attorneys
for both parties told a Manhattan federal court yesterday (Monday) they struck
a “resolution in principle” that would completely settle the case,
pending final commission approval. The deal would close the books on a dispute that
began with SEC charges in January 2023.
The
regulator accused Gemini, founded by billionaire twins Tyler and Cameron
Winklevoss, and its partner Genesis Global Capital of raising billions from
hundreds of thousands of customers through an unregistered securities offering.
The Gemini Earn program allowed retail investors to lend their cryptocurrency
assets to Genesis in exchange for interest payments as high as 8.05%.
Digital assets
meet tradfi in London at the fmls25
Earn Program Collapsed
Amid Market Turmoil
Genesis
halted withdrawals in November 2022 after facing liquidity pressures from
crypto market volatility. At the time, roughly 340,000 Gemini Earn customers
had approximately $900 million worth of digital assets trapped in the program.
The
collapse occurred around the same time as the
bankruptcy of Sam Bankman-Fried’s FTX exchange, which sent shockwaves
through the digital asset industry. Genesis subsequently filed for bankruptcy
protection, leaving Earn investors unable to access their funds for months.
Genesis
already settled its portion of the case earlier this year, agreeing
to pay a $21 million fine without admitting wrongdoing. The settlement with
Gemini would resolve the remaining claims against the exchange, which has
consistently denied any violations.
Trump Administration
Shifts Enforcement Approach
The
resolution comes as the SEC under the Trump administration has pulled back from
the aggressive crypto enforcement strategy pursued during the previous
presidency. Acting
SEC Chair Mark Uyeda told Gemini in February the agency would not pursue a
separate enforcement action against the company.
The new
administration has established
a Crypto Task Force led by Commissioner Hester Peirce to develop clearer
regulatory frameworks rather than pursuing “regulation by
enforcement.” The SEC has dismissed or settled several high-profile crypto
cases since President Trump took office.
“After
President Donald Trump took office the SEC has abandoned several lawsuits
against crypto companies, including Coinbase Global Inc. and Binance Holdings
Ltd.,” according to court filings.
Gemini Goes Public Amid
Resolution
The
settlement news comes just few days after
Gemini completed its initial public offering, raising $425
million and valuing the company at roughly $3.3 billion. Shares of Gemini
Space Station Inc. closed Monday at $32.52, trading 16% above the $28 IPO
price.
The
Winklevoss brothers were major financial supporters of Trump’s 2024 campaign
and have maintained close ties to the White House. They attended the signing of
recent stablecoin legislation and reportedly pressed the administration on
regulatory appointments.
Lawyers
requested all case deadlines be suspended and said they would update the court
by December 15 if the matter isn’t fully resolved by then. Neither Gemini nor
the SEC provided additional comments beyond the court filing.
The
Securities and Exchange Commission (SEC) and Gemini Trust have reached an
agreement to resolve a lawsuit over the cryptocurrency exchange’s Gemini Earn
lending program that froze $900 million in customer funds.
Attorneys
for both parties told a Manhattan federal court yesterday (Monday) they struck
a “resolution in principle” that would completely settle the case,
pending final commission approval. The deal would close the books on a dispute that
began with SEC charges in January 2023.
The
regulator accused Gemini, founded by billionaire twins Tyler and Cameron
Winklevoss, and its partner Genesis Global Capital of raising billions from
hundreds of thousands of customers through an unregistered securities offering.
The Gemini Earn program allowed retail investors to lend their cryptocurrency
assets to Genesis in exchange for interest payments as high as 8.05%.
Digital assets
meet tradfi in London at the fmls25
Earn Program Collapsed
Amid Market Turmoil
Genesis
halted withdrawals in November 2022 after facing liquidity pressures from
crypto market volatility. At the time, roughly 340,000 Gemini Earn customers
had approximately $900 million worth of digital assets trapped in the program.
The
collapse occurred around the same time as the
bankruptcy of Sam Bankman-Fried’s FTX exchange, which sent shockwaves
through the digital asset industry. Genesis subsequently filed for bankruptcy
protection, leaving Earn investors unable to access their funds for months.
Genesis
already settled its portion of the case earlier this year, agreeing
to pay a $21 million fine without admitting wrongdoing. The settlement with
Gemini would resolve the remaining claims against the exchange, which has
consistently denied any violations.
Trump Administration
Shifts Enforcement Approach
The
resolution comes as the SEC under the Trump administration has pulled back from
the aggressive crypto enforcement strategy pursued during the previous
presidency. Acting
SEC Chair Mark Uyeda told Gemini in February the agency would not pursue a
separate enforcement action against the company.
The new
administration has established
a Crypto Task Force led by Commissioner Hester Peirce to develop clearer
regulatory frameworks rather than pursuing “regulation by
enforcement.” The SEC has dismissed or settled several high-profile crypto
cases since President Trump took office.
“After
President Donald Trump took office the SEC has abandoned several lawsuits
against crypto companies, including Coinbase Global Inc. and Binance Holdings
Ltd.,” according to court filings.
Gemini Goes Public Amid
Resolution
The
settlement news comes just few days after
Gemini completed its initial public offering, raising $425
million and valuing the company at roughly $3.3 billion. Shares of Gemini
Space Station Inc. closed Monday at $32.52, trading 16% above the $28 IPO
price.
The
Winklevoss brothers were major financial supporters of Trump’s 2024 campaign
and have maintained close ties to the White House. They attended the signing of
recent stablecoin legislation and reportedly pressed the administration on
regulatory appointments.
Lawyers
requested all case deadlines be suspended and said they would update the court
by December 15 if the matter isn’t fully resolved by then. Neither Gemini nor
the SEC provided additional comments beyond the court filing.