The US Securities and Exchange Commission (SEC) has agreed to permanently drop its legal action against Gemini Trust Company (NASDAQ:GEMI) regarding the Gemini Earn program. This resolution comes after all affected investors received full restitution of their assets, marking the conclusion of a protracted regulatory conflict that spanned three years.
The dismissal, filed jointly by the SEC and Gemini in a Manhattan court on January 23, 2026, is “with prejudice,” meaning the agency cannot refile the same claims in the future.
The case originated in early 2023 when the SEC accused Gemini and its partner, Genesis Global Capital, of offering unregistered securities through the Earn program.
Gemini Earn allowed users to lend their digital assets to Genesis in exchange for interest yields, attracting over 200,000 participants and handling billions in crypto. The program halted withdrawals in November 2022 amid the fallout from the FTX collapse, which triggered Genesis’s bankruptcy filing.
This left investors in limbo, unable to access their funds, prompting the SEC’s lawsuit alleging violations of federal securities laws.
The turning point arrived through Genesis’s bankruptcy proceedings, where a court-approved plan facilitated the return of 100% of the crypto assets to Gemini Earn users in-kind—meaning they received the exact cryptocurrencies they had lent, rather than cash equivalents adjusted for market fluctuations.
This full recovery, valued at approximately $3 billion when accounting for crypto price appreciation since the freeze, exceeded initial expectations and addressed the core investor harm cited by regulators.
Gemini also contributed $50 million to the settlement efforts, underscoring its commitment to making users whole.
Former SEC Chair Gary Gensler has previously emphasized the need for crypto platforms to comply with securities regulations to protect investors.
In this instance, the agency’s decision to dismiss reflects satisfaction with the restitution outcomes, potentially signaling a pragmatic approach to enforcement when harms are rectified.
However, the case highlights ongoing tensions in the sector, where platforms like Gemini argue that their products do not fit traditional securities frameworks.
The Winklevoss twins, founders of Gemini, have been vocal critics of what they call overreaching regulation, viewing this closure as a vindication.
This resolution caps one of the longest-running enforcement actions in crypto’s post-2022 era, following the industry’s “crypto winter” marked by high-profile failures like FTX and Three Arrows Capital.
It also aligns with broader settlements, including Gemini’s agreements with state regulators, clearing the path for the exchange to focus on growth.
Industry observers note that such outcomes could encourage other firms to prioritize user protections and bankruptcy resolutions to avert prolonged legal battles.
The dismissal may influence future SEC cases, such as those against Coinbase or Binance, by demonstrating that full investor recovery can lead to favorable terminations.
For Gemini, this ends a challenging chapter, allowing it to rebuild trust and innovate in a maturing market. As crypto adoption rises, regulatory clarity remains crucial, but this case shows that restitution can bridge divides between enforcers and innovators.