The U.S. Securities and Exchange Commission (SEC) has formally dismissed its civil enforcement action against Gemini Trust Company concerning the Gemini Earn crypto lending program. This decision, announced on Wednesday, follows the complete recovery of crypto assets for all Gemini Earn investors, bringing an end to a three-year legal battle. The dismissal signals a notable shift in the regulatory landscape under the current administration.
The SEC's action, initiated in January 2023, had alleged that the Gemini Earn program constituted an unregistered securities offering. The program, which allowed users to lend crypto assets to Genesis Global Capital (GGC) for interest, froze withdrawals in November 2022 amidst a broader crypto market crisis, impacting approximately 340,000 users and locking up around $940 million.
According to reports, the full recovery for investors was facilitated through GGC's bankruptcy proceedings between May and June 2024, with customers receiving 100% of their crypto assets in kind. Gemini also contributed $40 million to the GGC bankruptcy estate and paid a $37 million fine to the New York Department of Financial Services (NYDFS) for regulatory failures.
The dismissal with prejudice means the SEC cannot refile the same claims against Gemini. This move aligns with a broader trend of enforcement retreats by the SEC under Chairman Paul Atkins, who assumed leadership in April 2025. The agency has reportedly dropped cases against other prominent crypto firms, including Coinbase, Kraken, and Ripple.
The Winklevoss twins, co-founders of Gemini, were noted financial supporters of President Trump's 2024 campaign and have maintained close ties with the administration. Their lobbying efforts to undo a settlement between their exchange and "Biden-era regulators" appear to have culminated in this week's regulatory outcome. This development underscores the influence of political shifts on cryptocurrency regulation.
