SEC drops Gemini Earn case, closing one of crypto’s longest-running enforcement actions

The U.S. Securities and Exchange Commission has formally dismissed its civil enforcement action against Gemini Trust Company.

This brings regulatory closure to one of the most closely watched cases tied to the collapse of crypto yield products in 2022.

In a litigation release published on 23 January, the SEC confirmed that it filed a joint stipulation to dismiss the case with prejudice. This means the agency cannot refile the same claims against Gemini in the future. 

The lawsuit was originally brought in January 2023 and centred on Gemini’s Earn program. The program allowed users to lend crypto to Genesis Global Capital in exchange for yield.

Full restitution cited as key factor

According to the SEC, the decision to drop the case was made “in the exercise of its discretion”.

Also, it took into account the 100% in-kind return of customer crypto assets to Gemini Earn investors, alongside prior state-level and regulatory settlements related to the program.

The regulator stressed that the dismissal does not reflect its position on other crypto cases.  This shows that the outcome is specific to Gemini’s remediation efforts rather than a broader shift in enforcement policy.

Still, the move effectively closes the SEC’s federal civil case against Gemini after nearly three years of litigation.

This is one example of an enforcement action resolved through customer restitution rather than a court ruling on whether the product itself violated securities laws.

A rare enforcement resolution

Dismissals with prejudice remain uncommon in high-profile crypto cases, particularly those tied to yield and lending products that drew heavy scrutiny following the failures of Celsius, BlockFi, and Genesis during the 2022 market downturn.

The Gemini Earn case had been one of the last unresolved enforcement actions stemming from that period. 

While the SEC’s lawsuit against Genesis Global Capital proceeded separately, Gemini’s exit from the case signals that regulators are willing to formally close actions once customer harm has been fully addressed.

What it signals for the market

The dismissal does not establish legal precedent on the classification of crypto yield products, nor does it indicate that similar offerings would be permitted under current U.S. securities law. 

However, it highlights restitution and investor recovery as decisive factors in enforcement outcomes.

While the SEC continues to pursue active cases across the sector, the closure of the Gemini Earn action draws a definitive line under one of the industry’s most contentious post-2022 enforcement chapters.

Final Thoughts

• The SEC’s dismissal underscores restitution as a decisive factor in resolving legacy crypto enforcement cases.
• While the outcome closes Gemini’s chapter, it does not signal broader regulatory leniency toward yield-based crypto products.