SEC drops lawsuit against crypto exchange Gemini

The Securities and Exchange Commission (SEC), which serves as the US securities regulator, has moved to drop its lawsuit against Gemini, the cryptocurrency exchange founded by Cameron Winklevoss and Tyler Winklevoss. In a joint filing submitted on Friday, the SEC and Gemini formally requested that the court dismiss the lawsuit. The legal dispute centered on the collapse of Gemini Earn, an investment product that had left some investors unable to access their money for a period of 18 months. In the new filing, the parties justified the dismissal by confirming that investors in the Gemini Earn program ultimately received “one hundred percent of the crypto assets they had loaned … through the Gemini Earn program.”

This federal dismissal follows a separate regulatory action in the state of New York, maintaining a clear distinction between state and federal legal challenges. In 2023, New York Attorney General Letitia James sued Gemini, accusing the company of defrauding investors. That litigation led to a 2024 settlement between New York and Gemini. It was this 2024 settlement that secured the return of the loaned crypto assets, which the SEC and Gemini cited in their joint filing on Friday as the primary reason the federal lawsuit should now be dismissed.

The regulatory shift appears to be part of a broader pattern of leniency from the administration of US President Donald Trump toward the cryptocurrency industry. Both Cameron and Tyler Winklevoss were donors to Trump’s reelection campaign and also backed his family’s business ventures. The impact of this administrative shift is reflected in recent regulatory actions; according to a report by The New York Times, the SEC has either dismissed, paused, or reduced penalties in more than 60% of the crypto lawsuits that were pending when Trump took office.

With the dismissal of the SEC lawsuit and the resolution of the New York state litigation, Gemini has cleared major regulatory hurdles. Following these developments, the company has filed to go public, initiating the process to launch an initial public offering (IPO) in the US.

Why it matters

The dismissal marks a significant shift in the US regulatory environment for crypto, signaling a move away from the aggressive litigation seen in previous years.