SEC Ends Gemini Earn Lawsuit After 100% In-Kind Crypto Repayment
The SEC dismissed its lawsuit against Gemini after investors in the Earn program received a full return of their crypto assets through the Genesis bankruptcy process.Summary
The US Securities and Exchange Commission (SEC) has dropped its enforcement case against cryptocurrency exchange Gemini, founded by Tyler and Cameron Winklevoss, following the complete repayment of assets to investors in the Gemini Earn program. A court filing revealed that Earn investors received a “100 percent in-kind” return of their cryptocurrency – meaning they received crypto back, not cash – through distributions completed during the Genesis Global Capital bankruptcy process between May and June 2024. The SEC stated that this full recovery significantly reduced investor harm, leading to the decision to dismiss the case with prejudice, preventing future court action on the same claims.
The original lawsuit, filed in 2023, alleged that Genesis Global Capital and Gemini Trust Company illegally sold securities through the Gemini Earn program, which allowed customers to loan crypto to Genesis in exchange for interest. The program froze customer accounts in November 2022 following the 2022 crypto market crash, with approximately $940 million in assets affected. Unlike some other collapses during that period, Genesis opted to return crypto assets directly to customers rather than liquidate assets for cash distributions.
The SEC clarified that this dismissal is specific to the Gemini Earn case and does not indicate a change in its stance on other crypto lending products. This decision coincides with a broader shift in crypto enforcement under the Trump administration, which has signaled a more favorable approach to digital asset businesses. Genesis has already settled with the SEC, paying a $21 million penalty, and Gemini reached a separate agreement with New York regulators, resulting in a $37 million penalty.
(Source：Analytics And Insight)