NEW YORK, Jan 24, 2026, 08:15 EST
- The SEC has dropped its civil case against Gemini related to the Gemini Earn lending program
- The agency highlighted a full “in-kind” return of customers’ crypto assets
- The dismissal is “with prejudice,” so the claims cannot be revived.
The U.S. Securities and Exchange Commission revealed Friday that it has dropped its civil lawsuit against Gemini Trust Company over the Gemini Earn crypto lending program. The SEC noted the dismissal is “with prejudice,” preventing it from refiling the same claims. (SEC)
This development is crucial because the Earn case centered on a heated debate about whether interest-bearing crypto programs qualify as securities offerings. It also brings an end to a legal battle tied to the 2022 market crash, which left retail investors stuck for months and pushed repayments into bankruptcy courts.
The SEC’s filing emphasized that Earn investors received a “100 percent in-kind return” of crypto assets—that is, they got their crypto back instead of cash. It also covered various state and regulatory settlements connected to the program. The document referenced a 2023 New York state lawsuit targeting Gemini, Genesis, former Genesis CEO Michael Moro, Digital Currency Group, CEO Barry Silbert, among others. According to the filing, Gemini agreed to help cover the returns, committing up to $40 million as part of a settlement with the New York Department of Financial Services, plus roughly $50 million for what’s called “Completion Digital Assets.” The filing also noted a March 2024 final judgment against Genesis, which included a $21 million penalty, and mentioned that in April 2025 the court stayed the SEC case while the parties worked toward a resolution. (SEC)
In January 2023, the SEC took legal action against Genesis Global Capital and Gemini, alleging they ran an unregistered securities offering through Gemini Earn. According to the agency, investors transferred crypto assets to Genesis with the expectation of earning interest, a structure the SEC says should have included the disclosures required for registered securities offerings. (SEC)
Gemini customers in the Earn program lent crypto to Genesis and earned interest until November 2022, when Genesis froze their accounts. At that time, Gemini reported the program contained $940 million in assets. After investors recovered their funds through the Genesis bankruptcy process between May and June 2024, Gemini and the SEC jointly filed a dismissal stipulation in Manhattan federal court, Reuters reported. Reuters also highlighted a change in the SEC’s crypto enforcement under former President Donald Trump, who called himself a “crypto president.” Now rebranded as Gemini Space Station and trading on Nasdaq under GEMI.O, Gemini had a notable Nasdaq debut last year and holds a valuation near $1.14 billion, according to LSEG data. (Reuters)
The filing’s language, however, keeps the door open for the SEC to chase other cases. It makes clear that opting for dismissal doesn’t necessarily reflect the commission’s view on related issues and limits the dismissal strictly to alleged conduct up to the filing date.
Crypto “earn” and yield products keep drawing regulatory ire. To users, they look like simple deposit accounts but mask hidden credit and liquidity risks that only become clear when markets get rocky. When this case concludes, the rules governing these products—and how they’re overseen—will remain unsettled.
For Gemini, the dismissal ends a case linked to the wider lending collapse that involved state courts and regulators. For the SEC, it underscores how bankruptcy recoveries and related settlements can undercut the argument for tougher federal enforcement.
