The US Securities and Exchange Commission (SEC) took a major step in the lawsuit against Gemini Trust Company over the failed Gemini Earn program. The watchdog dropped the case against the company. This move ended one of the most closely watched crypto enforcement cases, which emerged from the 2022 market collapse.
In a joint filing submitted on Friday, the SEC and Gemini asked a federal court to dismiss the case with prejudice. This means that the agency cannot bring the same claims again. The long-running case had been pending since January 2023. It also marks the closure of another major legal battle over the digital assets industry under the Trump rule. Gemini is run by twin founders Tyler Winklevoss and Cameron Winklevoss.Â
SEC ends Gemini Earn case but warns others
According to the release, the SEC stated that its decision was an exercise of discretion. It cited the 100 percent in-kind return of crypto assets to Gemini Earn customers. However, it also pointed to prior state and regulatory settlements tied to the program. Meanwhile, the agency suggested that this dismissal does not send any sort of shift in enforcement policy.
The filing said the decision does not reflect the SEC’s position in other cases. This involves crypto lending or yield products.
The Gemini Earn program was launched in February 2021. It granted users to earn yield by lending crypto assets to Genesis Global Capital. Gemini was acting as the front end and charged fees from users. Later, Genesis froze withdrawals in November 2022. This move followed the collapse of FTX which triggered a massive liquidity crisis in the crypto market.Â
Under Gemini Earn, customers lent bitcoin and other tokens to Genesis. In return, they received interest payments where Gemini earned fees that reached as high as 4.29%. Gemini has said customers were informed of risks. It has maintained that Genesis was responsible for the lending decisions and losses.
Genesis said it could not meet redemption requests. This resulted in more than $900 million in customer assets being locked at the time. Around 340,000 Gemini Earn users were affected due to the halt. However, Genesis filed for bankruptcy two months later.
Genesis settlement
The SEC came into action and sued Gemini and Genesis in January 2023. The agency alleged the companies sold unregistered securities to retail investors. It argued that Gemini Earn functioned as an investment contract under federal law.
Gemini denied the allegations and said that Earn was a lending arrangement and not a securities offering. However, Genesis did not contest the facts but later reached a separate settlement. Genesis reportedly agreed to pay a $21 million civil penalty. It did so without admitting or denying wrongdoing.Â
The settlement between the SEC and Gemini did not resolved the claims. Both parties showed some progress in September 2025. The agency agreed in principle to settle the case. Lawyers for both sides said the agreement would fully resolve the dispute, subject to commission approval.
The settlement disclosure in the case came days after Gemini completed an initial public offering. The exchange raised $425 million and the IPO valued the company at about $3.3 billion.
After months of negotiations, Gemini Earn customers eventually recovered their assets. The recovery was completed in kind rather than in cash. That outcome weighed heavily in the SEC’s decision to dismiss the case.
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