The U.S. Securities and Exchange Commission has agreed to dismiss its enforcement action against Gemini, the cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss, after investors in the platform’s troubled lending program were made whole.
Court filings on Friday showed that the SEC and Gemini Space Station jointly moved to dismiss the case in federal court in Manhattan, pointing to the complete return of crypto assets to Gemini Earn investors through the Genesis Global Capital bankruptcy process between May and June 2024. The regulator said it had decided last year to resolve the lawsuit following the recovery of funds, bringing a formal end to one of the more closely watched enforcement actions to emerge from the 2022 crypto market crash.
The case stemmed from the Gemini Earn program, under which customers loaned their crypto assets to Genesis Global Capital in exchange for interest payments. When Genesis froze withdrawals in November 2022, amid turmoil triggered by the collapse of FTX and sharp declines in digital asset prices, roughly $940 million worth of customer assets were locked up, according to Gemini’s earlier disclosures. The freeze sparked outrage among retail investors and drew scrutiny from U.S. regulators, who accused both Genesis and Gemini Trust Company in early 2023 of illegally selling unregistered securities to hundreds of thousands of investors.
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What ultimately set the Genesis bankruptcy apart from many other crypto failures of that era was its ability to return customer assets in kind rather than liquidating holdings and repaying investors in cash at depressed market prices. Through a combination of asset recoveries and settlements, Genesis was able to distribute 100% of Gemini Earn customers’ crypto back to them, a factor the SEC cited explicitly in its decision to drop the claims.
“After the 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements, the Commission believes the dismissal of the claims against Defendant is appropriate,” the SEC said in the filing.
At the same time, the regulator stressed that the dismissal should not be interpreted as a precedent or as signaling any broader conclusions about other pending or future cases.
The move comes amid a broader shift in Washington’s posture toward digital assets under President Donald Trump, who has repeatedly described himself as the “crypto president” and pledged to usher in clearer, more accommodating rules for the industry.
Since Trump returned to office, the SEC has faced pressure to recalibrate its aggressive enforcement-first strategy, which had defined much of the agency’s approach under the previous administration. Senior officials have indicated that the focus is increasingly on rulemaking and compliance frameworks rather than high-profile courtroom battles, particularly in cases where investor harm has already been remedied.
The dismissal removes a major overhang for Gemini as it continues to position itself as a regulated, institution-friendly crypto exchange. The company did not immediately respond to a request for comment outside regular business hours, but the resolution reinforces its argument that customers were ultimately protected despite the turmoil that followed Genesis’ collapse.
Gemini made a strong debut on Nasdaq last year, a milestone that underscored the growing acceptance of crypto firms in public markets. According to LSEG data, the exchange is currently valued at about $1.14 billion.
The outcome also highlights a subtle but important distinction emerging in the post-crash crypto landscape. While many firms that failed in 2022 left customers nursing steep losses, cases where investors have been fully repaid appear more likely to be met with regulatory leniency. Still, the SEC’s insistence that the Gemini dismissal does not reflect its position on other matters suggests the agency intends to preserve flexibility as it navigates a fast-evolving sector.
Taken together, the end of the Gemini case reflects a moment of transition for U.S. crypto regulation: a closing chapter on the fallout from the 2022 meltdown, and an early signal of how enforcement priorities may shift as digital assets move further into the financial mainstream.