The Securities and Exchange Commission (SEC) has officially dropped its lawsuit against Gemini, the prominent cryptocurrency exchange founded by brothers Cameron and Tyler Winklevoss. The federal regulator's decision comes after a significant settlement ensured full reimbursement for investors affected by the collapse of Gemini's Earn investment product, marking a key development for the crypto platform.
The SEC's initial legal action, filed in 2023, centered on Gemini's Earn program, which allowed users to lend their crypto assets and earn interest. The program's collapse left numerous investors unable to access their funds for approximately 18 months, prompting regulatory scrutiny and accusations of unregistered securities offerings.
The dismissal of the SEC's case follows a 2024 settlement reached between Gemini and the New York Attorney General, Letitia James. James had sued Gemini in 2023, alleging the company defrauded crypto investors of over $1 billion. The subsequent agreement ensured that all affected investors in the Gemini Earn program received "one hundred percent of the crypto assets they had loaned [...] through the Gemini Earn program," a crucial factor cited in the SEC's joint filing requesting the lawsuit's termination.
This development appears to align with a broader pattern of leniency from the Trump administration towards the cryptocurrency industry. The New York Times previously reported that the SEC, under the current administration, has either dismissed, paused, or reduced penalties in over 60 percent of crypto-related lawsuits that were pending when Trump took office last year. The Winklevoss twins themselves have been notable donors to Donald Trump's re-election campaign and have also supported his family's business ventures.
Amidst these legal developments, Gemini has also taken steps to go public, having filed for an initial public offering (IPO).
