The U.S. Securities and Exchange Commission (SEC) officially dismissed the enforcement lawsuit against Gemini regarding its cryptocurrency lending product “Gemini Earn” on Friday, and submitted a “Dismissal with prejudice” joint statement to the court, meaning the case is settled and the SEC cannot bring the same claim again in the future.
The SEC stated that the key factor in the decision to dismiss was that all Gemini Earn investors have fully recovered their original crypto assets. According to the SEC’s court filing, through the bankruptcy liquidation process of Genesis Global Capital, investors have recovered 100% of their crypto assets via “in kind” distribution between May and June 2024. Additionally, Gemini has reached settlements with various state regulators, leading the SEC to exercise its discretion and cease further enforcement.
The “Gemini Earn” controversy began in 2021 when the product attracted 340,000 users with an annualized yield of up to 7.4%. However, following the collapse of FTX in 2022, which triggered a chain reaction, Gemini’s partner Genesis Global Capital faced a liquidity crisis and froze withdrawals, locking up approximately $940 million of customer assets.
Subsequently, in January 2023, the SEC filed lawsuits against Genesis and Gemini, accusing Gemini Earn of offering unregistered securities. In March 2024, a federal judge dismissed Gemini and Genesis’s motions to dismiss, ruling that the SEC’s allegations were reasonable. But as investor assets were gradually recovered and multiple regulatory settlements were reached, the case’s momentum began to shift.
Before the SEC dismissed the case, relevant parties had reached a series of investor compensation and settlement agreements: Genesis paid $21 million in settlement to the SEC; Gemini paid a $37 million fine to the New York State Department of Financial Services (NYDFS), and additionally contributed $40 million to the bankruptcy proceedings to ensure full asset recovery for users.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
