- The SEC and Gemini Space Station moved to dismiss the case after a full in-kind return of Gemini Earn assets through the Genesis bankruptcy between May and June 2024.
- In 2023, the SEC alleged unregistered securities sales tied to Gemini Earn, which held $940 million when Genesis froze accounts in November 2022.
- The SEC said the dismissal does not indicate a view on other cases; Gemini debuted on Nasdaq last year and is valued at $1.14 billion.
The sec dismisses gemini earn lawsuit after U.S. regulators and the crypto exchange now known as Gemini Space Station filed paperwork in federal court to end the case. The U.S. Securities and Exchange Commission said the decision followed the full recovery of assets by investors in the Gemini Earn lending program, with the return occurring through the Genesis Global Capital bankruptcy process between May and June 2024.
Friday’s court filing in Manhattan closes an enforcement action that began in 2023, when the SEC accused Genesis Global Capital and Gemini Trust Company of unlawfully selling securities tied to the lending program. The dismissal comes as the SEC’s broader approach to crypto enforcement changes under President Donald Trump, who has said he intends to be the “crypto president” and back more favorable rules while encouraging broader digital-currency use.
How the sec dismisses gemini earn lawsuit and what the court filing said
The SEC and Gemini Space Station submitted a joint stipulation in the U.S. District Court for the Southern District of New York in Manhattan seeking dismissal. In the filing, the parties pointed to the complete return of crypto assets to Gemini Earn investors during the Genesis bankruptcy process, which took place between May and June 2024. The document said that, following the “100 percent in-kind return” of those assets through the bankruptcy and related settlements, the SEC considered it appropriate to drop the claims against the defendant.
The SEC also added a limitation to its decision. According to the court document, the agency said the dismissal should not be read as signaling its view on any other matter. That note is often watched closely because crypto cases can overlap in legal theories, market conduct, and the definition of securities products. Here, the filing framed the dismissal narrowly around the status of investor recovery in the Gemini Earn program.
Gemini did not provide an immediate response to a Reuters request for comment outside regular business hours.
Background on the Gemini Earn program and Genesis bankruptcy returns
The enforcement case traced back to the Gemini Earn program, a crypto lending arrangement offered to Gemini customers. Participants loaned their cryptocurrency to Genesis and received interest payments on the assets they lent. The SEC’s 2023 complaint named Genesis Global Capital and Gemini Trust Company, alleging they sold securities unlawfully to hundreds of thousands of investors through the program.
Gemini has previously said the total value of Gemini Earn assets stood at $940 million when Genesis froze customer accounts in November 2022. The account freeze followed the broader stress that hit the crypto market in 2022. In the period after that market crash, several crypto firms entered bankruptcy and faced pressure to repay customers with limited remaining assets. In Genesis’s case, the outcome described in the source differed from many of those collapses. Genesis was able to return customers’ crypto, rather than selling a constrained set of assets and paying customers back in cash.
That ability to return crypto “in-kind” became central to the Friday filing. The stipulation said the Genesis bankruptcy process and settlements resulted in a full return of the crypto assets that Gemini Earn investors had placed into the program. The SEC cited that completed recovery as the key reason it agreed to end the case.
Policy context as sec dismisses gemini earn lawsuit
The dismissal also arrives during a shift in federal crypto policy. The source says the SEC has adjusted its approach to crypto enforcement under President Donald Trump. Trump has promised to act as the “crypto president,” and has said he intends to bring in rules that are more favorable to the sector while promoting mainstream use of digital currencies.
The regulator had already decided to resolve the lawsuit last year, according to the source. Friday’s filing completed that step formally in court, tying the dismissal to investor recovery through the Genesis bankruptcy timeline of May and June 2024.
Gemini’s corporate position has also changed since the SEC brought the case. The exchange, founded by billionaire twins Tyler and Cameron Winklevoss, is now known as Gemini Space Station and trades under the ticker GEMI.O. The source also notes that Gemini made a strong debut on Nasdaq last year, which it said highlighted institutional adoption that has supported renewed optimism around digital assets. Data from LSEG puts the exchange’s current value at $1.14 billion.
Conclusion
With the joint stipulation filed in Manhattan federal court, the sec dismisses gemini earn lawsuit based on the SEC’s view that Gemini Earn investors have recovered their crypto assets in full through the Genesis Global Capital bankruptcy process between May and June 2024. The agency said the dismissal should not be taken as guidance on other cases, while the exchange did not immediately comment outside regular business hours.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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