SEC Drops Lawsuit Against Gemini After Users Get 100% Funds Back
The SEC dismissed its lawsuit against Gemini after all users of the Gemini Earn program were fully reimbursed their crypto assets.Summary
The U.S. Securities and Exchange Commission (SEC) has dropped its lawsuit against Gemini Trust Company following the full repayment of funds to users affected by the Gemini Earn program. The SEC and Gemini jointly agreed to dismiss the case with prejudice on January 23, 2026, citing the complete restitution of crypto assets – approximately $900 million to nearly 340,000 users – through the Genesis Global Capital bankruptcy process between May and June 2024. Gemini also contributed $50 million in assets and paid a $37 million penalty to New York regulators to facilitate the repayment.
The original case stemmed from a partnership between Gemini and Genesis in December 2020, where users could lend crypto for interest. When Genesis collapsed in the 2022-2023 crypto market downturn, withdrawals were frozen, leading to the SEC lawsuit. The SEC stated that the full reimbursement significantly reduced investor harm and, combined with settlements with state regulators, justified dismissing the case.
While this dismissal resolves a major legal issue for Gemini, it doesn't automatically approve new yield or lending products, which will still require regulatory compliance. The SEC’s approach in this case suggests a willingness to consider investor remediation when determining enforcement outcomes, but does not indicate a lessening of overall crypto oversight.
(Source：Coinpedia)