TLDR
- To seek a potential agreement, the SEC and Gemini have collectively asked for a two-month pause in their current lawsuit.
- In the January 2023 lawsuit against Gemini, accusations were made that their Earn program involved unregistered securities.
- March 2024 witnessed Genesis settling accusations relating to the issue by agreeing to a $21 million settlement.
- Since the Trump administration took over, there's a noticeable trend of softer enforcement actions by the SEC in the crypto realm.
- A number of cryptocurrency businesses have recently seen their SEC probes come to an end.
A request was made by the SEC and Gemini at a federal court in New York to halt their legal fight for 60 days. This plea was laid out in a letter to Judge Edgardo Ramos on April 1. Their goal is to potentially resolve their conflict over the Earn initiative by pausing the proceedings.
In a cooperative move, they argue that taking a break from the case would benefit both parties and save legal resources, with no adverse effect on other parties.
Case Background
Back in January 2023, the SEC filed a lawsuit accusing Gemini and Genesis Global Capital of offering unregistered securities through the Earn program.
The program let users loan crypto like Bitcoin to Genesis in exchange for interest, with Gemini collecting fees up to 4.29% for facilitating.
Genesis stopped allowing customer withdrawals in November 2022, coinciding with the downfall of the FTX exchange led by Sam Bankman-Fried, and filed for bankruptcy soon after.
When they declared bankruptcy, Genesis held $900 million worth of crypto assets belonging to about 340,000 users of the Gemini Earn program.
Recent Developments
While Gemini's case continues, Genesis agreed in March 2024 to pay $21 million over related charges, with no acknowledgment of wrongdoing.
Gemini refutes any misconduct; it is directed by billionaire siblings Tyler and Cameron Winklevoss, who are each valued at $3 billion by Forbes.
The letter doesn't clarify what the settlement might entail, which could involve anything from formal agreements to dropping the lawsuit.
Changing Regulatory Environment
The backdrop of this possible deal is a changing U.S. regulatory landscape for crypto since Donald Trump became president in early 2025.
In February, Gemini made public that a different investigation by the SEC had concluded with no action, with Cameron Winklevoss criticizing the SEC for hindering their business.
Other cryptocurrency firms are also experiencing some relief from regulatory oversight, with the SEC concluding cases against big names in the sector.
The legal troubles of Coinbase, Kraken, and a settlement with Ripple Labs regarding securities issues are part of this easing trend.
Industry-Wide Pattern
The notion of resolving the Gemini case fits a larger context where companies like OpenSea, Crypto.com, and Uniswap have also noted the closure of SEC inquiries.
These investigations looked into potential securities laws violations, with recent closures hinting at the SEC's new post-Trump approach.
The Winklevoss twins were among the prominent figures at the White House Crypto Summit in March 2025, evidencing a friendlier regulatory stance.
The listed case of SEC versus Gemini Trust Company is in the Southern District of New York, with both parties awaiting a decision on pausing the proceedings.
