• SEC dropped the Gemini Earn case after investors recovered all crypto assets through bankruptcy and added Gemini funding.
• Full in kind asset recovery reduced enforcement pressure and led regulators to close a long running crypto case.
• The dismissal adds to a growing list of dropped US crypto cases following a shift in federal oversight policy reset.

The US Securities and Exchange Commission has ended its civil lawsuit against Gemini Trust Company and Genesis Global Capital. The ruling marks the end of a big enforcement proceeding on the Gemini Earn program. 

Court records indicate that both parties accepted dismissal with prejudice. A federal judge must still approve the joint filing. The move follows full asset recovery for affected Gemini Earn users.

SEC Ends Gemini Earn Enforcement Case

The U.S. Securities and Exchange Commission agreed to drop claims after investors recovered all crypto assets in kind. The agency cited completed recoveries through the Genesis bankruptcy process. It also referenced Gemini’s commitment to contribute up to $40 million. The contribution supports the final return of customer assets. Therefore, the SEC exercised enforcement discretion and moved to close the case.

The dismissal arrived months after the SEC paused proceedings in April 2024. At that time, leadership changes slowed several crypto cases. Since then, regulators reviewed outcomes tied to investor restitution. Consequently, the agency concluded further litigation offered limited public benefit. The dismissal prevents the SEC from re-filing identical claims.

Recovery Drives Regulatory Resolution

Gemini Trust Company launched the Earn program in February 2021. The product allowed users to lend crypto to Genesis for yield. Gemini operated the customer interface and collected fees. Meanwhile, Genesis Global Capital handled lending and risk decisions.

In November 2022, Genesis froze withdrawals when market stress increased. The freeze was after the collapse of FTX and extensive liquidity crises. This, consequently, rendered over $900 million of customer assets inaccessible. About 340,000 Earn users faced losses during the halt. Genesis filed for bankruptcy two months later.

During bankruptcy proceedings, customers recovered assets in kind. The recovery was finished by mid-2024. This outcome weighed heavily in the SEC’s decision. Regulators emphasized that investors regained their crypto holdings, not cash equivalents. Consequently, the agency viewed enforcement goals as largely met.

Broader Shift in Crypto Enforcement

The case began in January 2023 during heightened crypto enforcement. Regulators alleged Gemini Earn involved unregistered securities. Gemini rejected that view and framed Earn as a lending arrangement. Genesis later settled separately with the SEC. It agreed to pay a $21 million civil penalty without admissions. Gemini later agreed to a $50 million settlement with NYAG for misleading 230,000 investors in its Gemini Earn program.

Since January 2025, federal agencies dropped several crypto cases. These actions followed a shift toward lighter regulation. Agencies ended matters involving Binance, Kraken, and Uniswap. They also closed cases involving Immutable and Robinhood. Collectively, these decisions signal a recalibration of enforcement priorities.

Parallel Legal Developments Add Context

Other agencies also narrowed crypto-related prosecutions. The Department of Justice dismissed an NFT insider trading case this week. The case concerned a former OpenSea manager Nathaniel Chastain. His previous convictions were reversed by an appeals court. This led to the dismissal of remaining charges by prosecutors. The SEC ended the OpenSea investigation on Feb 21, 2025, following Coinbase case drop.

Meanwhile, Gemini finalized its public listing days before the settlement disclosure. The exchange raised $425 million through its IPO. Gemini had filed for an IPO with the SEC in June last year. The offering valued Gemini near $3.3 billion. Although unrelated legally, the timing underscored closure around legacy disputes.