The Securities and Exchange Commission (SEC) has filed a motion to dismiss its high-profile lawsuit against cryptocurrency exchange Gemini Trust Company LLC, concerning the failed Gemini Earn lending program. The motion seeks dismissal “with prejudice” following the confirmation that all investors in the program have achieved full recovery of their digital assets, marking a decisive end to the three-year legal battle.
The dismissal notice, submitted to the U.S. District Court for the Southern District of New York, effectively concludes the litigation the SEC initiated in January 2023. The agency had previously charged both Gemini and its partner, the now-bankrupt Genesis Global Capital (a subsidiary of Digital Currency Group, or DCG), with offering and selling unregistered securities through the Earn product.
The crucial development enabling the SEC’s decision is the successful execution of the Genesis bankruptcy reorganization plan. This plan guaranteed that Gemini Earn users would receive 100% of their assets, calculated based on current market values—a full restitution that far surpassed initial recovery projections and satisfied the regulator’s primary goal of protecting investors.
The term “dismissed with prejudice” is vital, as it confirms that the SEC cannot refile these specific charges against Gemini related to the Earn program. For Gemini and its co-founders, Cameron and Tyler Winklevoss, the resolution represents a major victory, reinforcing their commitment to securing complete restitution for their customers amidst one of the most significant crypto lending failures of the 2022 market downturn.
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