SEC Closes Gemini Earn Case; 100% Recovery Guaranteed

The U.S. Securities and Exchange Commission on Friday, January 23, formally dismissed its civil enforcement action against Gemini Trust Company, LLC, permanently closing a case tied to the now-defunct Gemini Earn crypto lending program. The dismissal, filed jointly in the Southern District of New York, ends the matter with prejudice, preventing the claims from being refiled.

According to the court filing, the SEC said its decision followed a review of investor outcomes and related settlements, noting that Gemini Earn customers ultimately recovered 100% of their crypto assets in kind. The agency emphasized that the move reflects regulatory discretion rather than a broader policy shift on digital asset enforcement.

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SEC Links Gemini Earn Case to Genesis Bankruptcy Fallout

The lawsuit originated in early 2023, when the SEC sued Genesis Global Capital and related parties over the offering of unregistered yield-bearing crypto products.

Gemini Trust Company became implicated due to its role in operating and marketing the Gemini Earn program, which allowed customers to lend digital assets in exchange for yield.

Genesis has since entered the stage of bankruptcy, resulting in significant losses for Gemini Earn investors across the country. Asset recovery has since emerged as an important area of enforcement action during the subsequent negotiations.

Within its stipulations, the SEC claimed that making full restitution to investors, coupled with settlements with various state regulators, heavily influenced their decision to dismiss the case. They claimed that they wanted to prevent duplication of penalties after addressing various issues with the program.

SEC Closes Gemini Earn Case Without Precedent

The Commission also emphasized in its statement that this action does not set a precedent or reflect a change in enforcement posture. It also mentions in its statement that this action does not reflect the Commission’s position on any other matter. It also mentions that the review of each case regarding digital assets will be based on its individual facts and circumstances.

Additionally, by dismissing the case with prejudice, it means that the SEC has permanently closed its claims against Gemini Trust Company regarding their Gemini Earn case. It has been observed that finality in such matters is not very common in matters of cryptocurrency enforcement actions and reflects their emphasis on providing investors with restitution as an end result of their actions.

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