SEC drops lawsuit against Gemini after asset recovery

SEC drops lawsuit against Gemini and Genesis after investors fully recover assets and Gemini agrees to a $40M contribution. Dismissal is with prejudice and awaits court approval.

The US Securities and Exchange Commission (SEC) has dismissed its civil lawsuit against Gemini Trust Company and Genesis Global Capital concerning the Gemini Earn program. This follows a joint stipulation in federal court and comes after Gemini agreed to contribute $40 million toward the full recovery of assets for Gemini Earn investors affected by Genesis’s bankruptcy. The bankruptcy process resulted in investors receiving a 100% in-kind return of their crypto assets. Genesis had previously settled with the SEC by agreeing to pay a $21 million fine. The SEC cited the full recovery of investor assets as a key reason for dropping the case. However, the SEC emphasized that this dismissal does not indicate a shift in its enforcement approach toward other crypto lending or yield products. The dismissal, which is with prejudice and prevents refiling the same claims, still requires final approval from a federal judge. This outcome marks a significant legal milestone for the crypto industry and could influence future regulatory actions.