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.
SEC, Gemini Near Settlement in $900 Million Crypto Lending Case
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.
