The US Securities and Exchange Commission has moved to end its civil lawsuit against Gemini Trust Company and Genesis Global Capital, bringing a high-profile crypto lending dispute closer to resolution.
A joint filing submitted Friday in the US District Court for the Southern District of New York seeks dismissal of the case with prejudice, meaning the regulator cannot refile the same claims. The request still requires a judge’s approval, but it signals that the SEC no longer intends to pursue enforcement action over Gemini’s Earn program.
Why the SEC stepped back
The decision follows the near-complete recovery of customer funds tied to the collapsed Genesis lending business. Through Genesis’s bankruptcy process in mid-2024, Gemini Earn users received a full return of their crypto assets in kind. Gemini also agreed to contribute up to $40 million to support the repayment effort.
Genesis had already resolved its own regulatory exposure by agreeing to pay a $21 million penalty to the SEC.
The enforcement action was first launched in January 2023, when US regulators intensified scrutiny of crypto lending platforms and other digital asset products. The case alleged that Gemini and Genesis had offered unregistered securities through the Earn program.
Timeline of the dispute
The lawsuit entered a holding pattern in April 2024, when the SEC paused proceedings during leadership changes at the agency under then-acting chair Mark Uyeda. Nearly nine months later, the regulator’s willingness to drop the case reflects shifting priorities as restitution for investors has largely been completed.
A broader shift in crypto enforcement
Gemini’s case is part of a wider pattern of regulatory pullback since the change in US political leadership in January 2025. Several major crypto-related investigations and lawsuits involving companies such as Binance, Kraken, Uniswap, Immutable, and Robinhood have been dropped or wound down.
Outside the SEC, the Department of Justice recently dismissed its NFT insider trading case against former OpenSea executive Nathaniel Chastain, after a federal appeals court overturned his earlier convictions for wire fraud and money laundering.
What this means for the crypto industry
The dismissal of the Gemini case highlights how investor restitution and negotiated settlements can reshape enforcement outcomes in the crypto sector. It also underscores the evolving regulatory climate in the US, where policy direction and leadership changes are influencing how aggressively agencies pursue digital asset cases.
For crypto firms, the episode signals that regulatory risk remains real but increasingly tied to consumer harm and unresolved losses rather than blanket enforcement against lending models. For investors, it suggests that the aftermath of the crypto lending boom is moving toward closure, even as questions about long-term oversight of digital asset products remain open.
What to watch next
The judge’s approval of the dismissal will formally close the case. Beyond Gemini, attention is likely to shift to how US regulators redefine their approach to crypto oversight and whether future enforcement actions focus on systemic risks, stablecoins, or decentralized finance platforms.
