SEC Drops Lawsuit Against Gemini Over Earn Product

SEC Dismisses Gemini Lawsuit

The U.S. Securities and Exchange Commission (SEC) has dismissed its lawsuit against crypto exchange Gemini concerning the now-defunct Earn product. The decision follows the full repayment of investors via Genesis' bankruptcy proceedings.

Background of the Case

The SEC sued both Gemini and Genesis Global Capital in 2023, alleging the sale of unregistered securities through Gemini's Earn product. The lawsuit claimed investors' funds were loaned to Genesis, which later halted withdrawals amid the 2022 crypto market downturn.

Resolution and Implications

In a recent court filing, the SEC and Gemini reached a joint stipulation confirming that Gemini had reimbursed investors 100% of their assets. This action was facilitated through the Genesis bankruptcy process, pending a federal judge's approval.

The SEC noted that Genesis had settled with the regulatory body, agreeing to a $21 million fine, while Gemini reached a settlement with New York state regulators.

Future Regulatory Outlook

This case is among several lawsuits the SEC has recently dropped. Current SEC Chair Paul Atkins indicated that new guidelines for crypto companies are forthcoming to clarify what constitutes a security, amid ongoing legislative debates.