The US Securities and Exchange Commission (SEC) has agreed to dismiss its enforcement case against Gemini Space Station, the cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss. The move comes after investors in its lending program recovered their assets in full through the Genesis Global Capital bankruptcy process.
The SEC and Gemini filed a joint stipulation in federal court in Manhattan on Friday, citing the complete return of crypto assets to Gemini Earn investors between May and June 2024. The financial regulator had decided to resolve the lawsuit last year, reflecting a shift in its approach to crypto enforcement under Donald Trump, who promised to be the 'crypto president'.
In 2023, the SEC charged Genesis Global Capital and Gemini Trust Company with illegally selling securities to hundreds of thousands of investors through their crypto lending program. Gemini customers who participated in the Gemini Earn program loaned their crypto to Genesis and were paid interest on their loaned assets. The total value of the Gemini Earn assets was $940m when Genesis froze customer accounts in November 2022.
The New York state attorney general pursued the company in court, winning a $50m settlement that went towards making users whole. Unlike other crypto companies that went bankrupt after a 2022 market crash, Genesis was able to return customers' crypto to them rather than liquidating assets. Gemini was banned from operating a crypto lending program in New York as part of the settlement.
The SEC emphasised that its decision to seek dismissal does not reflect its position on any other case. Gemini last year made a strong debut on Nasdaq, and the exchange is now valued at $1.14bn, according to LSEG data.
