The U.S. Securities and Exchange Commission and the exchange now known as Gemini Space Station have jointly asked a federal court in Manhattan to dismiss the SEC's enforcement action tied to a crypto lending program, citing the complete return of investor assets.
According to the joint stipulation filed on Friday, the return of crypto to investors in the Gemini Earn program was accomplished through the Genesis Global Capital bankruptcy process between May and June 2024. The SEC had previously moved to resolve the lawsuit last year.
The enforcement action traces back to charges the SEC brought in 2023 against Genesis Global Capital and Gemini Trust Company, alleging the illegal sale of securities to hundreds of thousands of investors through the Gemini Earn lending program. Under that program, Gemini customers lent their crypto holdings to Genesis and received interest on those loaned assets.
When Genesis froze customer accounts in November 2022, Gemini previously said the total value of assets in the Gemini Earn program was $940 million. Rather than liquidating a limited pool of assets and repaying investors in cash, Genesis ultimately returned customers' crypto holdings in kind, the court filing notes.
"the 100 percent in-kind return of Gemini Earn investors crypto assets through the Genesis Bankruptcy and the settlements ... the Commission believes the dismissal of the claims against Defendant is appropriate,"
The court filing emphasized that after the full in-kind restitution to Earn investors and the settlements achieved through the bankruptcy process, the SEC considers dismissal of the claims against the defendant appropriate.
The SEC also made clear that this decision to seek dismissal does not set a precedent for other matters and does not reflect the agency's position on unrelated cases.
Public reporting noted that the SEC has shifted its approach to crypto enforcement under U.S. President Donald Trump, who has expressed support for broader mainstream adoption of digital currencies and has pledged to pursue more favorable rules for the sector.
Gemini did not immediately respond to a request for comment outside regular business hours.
Separately, market information noted that Gemini made a strong debut on the Nasdaq last year and that the exchange is currently valued at $1.14 billion, according to data provided by LSEG.
For investors in the Gemini Earn program, the bankruptcy route led to a full recovery of their crypto balances rather than a cash settlement. That outcome was central to the SEC and the exchange jointly asking the Manhattan federal court to dismiss the enforcement action.
Context and implications
The joint stipulation and its rationale focus narrowly on the return of assets to the affected investors and the settlements completed in the Genesis bankruptcy. The SEC's filing underscores that the dismissal applies to this defendant and does not imply broader regulatory conclusions for other firms or programs under investigation.