SEC Drops Lawsuit Against Winklevoss’ Gemini

The Securities and Exchange Commission (SEC) dismissed its lawsuit against the Winklevoss-founded Gemini crypto exchange in a federal court filing on Friday, citing a previous New York settlement that fully repaid affected investors.

The Genesis of the Gemini Earn Dispute

The legal battle originated from the high-profile collapse of Gemini Earn, an investment product that left users unable to access their digital assets for 18 months. In a joint filing submitted on Friday, regulators and the exchange formally requested the court to dismiss the litigation surrounding the failure of the Gemini Earn program.

Why the SEC Agreed to Dismiss the Case

The motion to dismiss relies heavily on a prior resolution of related state-level charges. In 2023, New York Attorney General Letitia James sued Gemini, accusing the platform of defrauding its investors. However, the new joint filing highlights a 2024 settlement between Gemini and New York State, which ensured that customers recovered “one hundred percent of the crypto assets they had loaned” through the Earn program, effectively neutralizing the SEC’s primary damages claim.

A Broader Shift in Federal Crypto Enforcement

This dismissal aligns with a noticeable shift in how federal agencies treat digital asset firms under the current administration. Founders Cameron and Tyler Winklevoss were prominent financial backers of Donald Trump’s reelection campaign and have actively supported his family’s business endeavors. Reports indicate the SEC has dropped, paused, or reduced penalties in over 60% of active cryptocurrency lawsuits since the administration took office last year.

Gemini Eyes Public Markets

With this major regulatory hurdle cleared, the exchange is positioning itself for its next chapter. Gemini has officially filed paperwork to launch an initial public offering (IPO), signaling its intention to transition into a publicly traded company.