SEC agrees to dismiss case over crypto lending by Winklevoss’ Gemini

The U.S. Securities and Exchange Commission on Friday agreed to dismiss an enforcement action against a cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss, after investors in the lending program recovered all of their assets.

The SEC and the exchange, now known as Gemini Space Station, filed a joint stipulation to dismiss the case in federal court in Manhattan, citing the full return of crypto assets to Gemini Earn investors through the Genesis Global Capital bankruptcy process between May and June 2024.

The financial regulator decided to resolve the case last year.

The SEC has changed its approach to crypto enforcement under US President Donald Trump, who has promised to become the “crypto president”, introducing more favorable rules and promising to expand the mainstream use of digital currencies.

Gemini did not immediately respond to Reuters’ request for comment outside normal business hours.

In 2023, the SEC accused Genesis Global Capital and Gemini Trust Company of illegally selling securities to hundreds of thousands of investors through crypto lending programs.

Gemini customers participating in the Gemini Earn program lent their crypto to Genesis and received interest on the loaned assets. Gemini has previously said the total value of Gemini Earn assets was $940 million when Genesis froze customer accounts in November 2022.

Unlike other crypto companies that went bankrupt following the market crash of 2022, Genesis was able to return customers’ crypto to them rather than liquidating a limited pool of assets and paying them back in cash.

“Following the 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and settlements… the Commission believes it is appropriate to dismiss the claims against the Defendant,” according to the court document filed Friday.

The SEC emphasized that its decision to dismiss does not reflect its stance on any other case.

Gemini made a strong debut on Nasdaq last year, underscoring the rapid institutional adoption that has renewed investor optimism for digital assets. According to data provided by LSEG, the stock market is currently valued at $1.14 billion.