The U.S. SEC has agreed to drop an enforcement action against a crypto exchange founded by billionaire brothers Cameron and Tyler Winklevoss after clients tied to a disputed lending product were fully repaid.
Recent court filings show that the SEC and the exchange, now operating under the name Gemini Space Station, jointly asked a federal judge in New York to dismiss the case. The filing states that all assets owed to participants in the Gemini Earn program were returned through the bankruptcy proceedings of Genesis Global Capital, which concluded in 2024.
The SEC noted that the outcome made it appropriate to abandon its claims. The agency added that the decision applies only to this matter and does not signal a change in its position in other ongoing cases.
The federal regulator had already signaled last year that it planned to resolve the dispute, though the formal dismissal came only after the repayment process concluded.
The suit dates back to 2023 when the SEC accused Gemini Trust Company and its lending partner, Genesis, of offering unregulated securities through a crypto lending arrangement.
Gemini Earn allowed users to lend their digital tokens to Genesis in exchange for interest payments. When Genesis halted withdrawals in November 2022 amid turmoil in the crypto markets, roughly $940 million worth of customer assets were locked up, based on figures previously disclosed by the companies.
The fallout also prompted legal action from New York’s attorney general, who sued the firms and later secured a $50 million settlement aimed at compensating affected users. As part of that agreement, Gemini was barred from offering crypto lending services in New York.
Unlike several other crypto businesses that collapsed after the market downturn in 2022, Genesis was ultimately able to return customers’ digital holdings rather than liquidating assets and issuing cash repayments.
The move fits into a broader shift in Washington toward a more accommodating stance on crypto assets. Under President Donald Trump, the administration has rolled back elements of the stricter regulatory approach championed by former President Joe Biden. Trump has publicly embraced crypto, pledged to encourage its wider adoption, pardoned Binance founder CZ, and even launched his own digital token.
Investor sentiment has improved alongside the changing climate. Gemini made a strong debut on the Nasdaq last year, highlighting growing acceptance of crypto firms among traditional financial institutions. The exchange is currently valued at approximately $1.4 billion, according to data from LSEG.
The amicable resolution of the suit filed against the Winklevoss twins’ company is likely to send positive signals to the entire crypto industry, including entities like MicroStrategy Inc. (NASDAQ: MSTR), about the turnaround in the regulatory climate within the country.
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