The SEC has formally ended its action against Gemini, citing the full in‑kind return of assets to Earn customers and parallel settlements with New York authorities
The US Securities and Exchange Commission (SEC) has moved to dismiss its civil enforcement action against Gemini Trust Company, bringing an end to the federal case centred on the now‑closed Gemini Earn programme.
In a joint stipulation filed in the Southern District of New York, the SEC said it was exercising its discretion to conclude the matter following the full repayment of Earn customers through the Genesis Global Capital bankruptcy process and related state‑level settlements.
The filing states that “in light of the foregoing, the 100 percent in-kind return of Gemini Earn investors’ crypto assets… and in the exercise of its discretion, the Commission believes the dismissal of the claims against Defendant is appropriate.”
The decision follows a series of developments across 2024. Genesis, Gemini’s Earn partner, consented to a final judgment in March 2024 requiring a $21m penalty to be treated as a general unsecured claim in its Chapter 11 proceedings. Between May and June 2024, Earn customers received the full amount of digital assets they had loaned to Genesis, returned in kind through the bankruptcy estate.
Gemini also reached separate agreements with New York regulators. A February 2024 settlement with the Department of Financial Services committed the firm to contribute up to $40m to support the return of customer assets. In June 2024, the New York Attorney General’s office finalised its own settlement, under which Gemini agreed to fund approximately $50m in “Completion Digital Assets” to facilitate customer restitution.
The SEC emphasised its decision “does not necessarily reflect the Commission’s position on any other case,” underscoring that the dismissal is specific to the circumstances surrounding Earn and the completed customer repayments.
Under the stipulation, the claims against Gemini are dismissed with prejudice for conduct up to the filing date.
Gemini, in turn, waives any right to seek fees or costs from the US government, including under the Equal Access to Justice Act, and releases “any and all claims… that arise from or in any way relate to the Litigation.”
The filing was signed by SEC Enforcement Director Margaret Ryan and Gemini’s counsel at Baughman Kroup Bosse PLLC.
What the SEC’s original Gemini case alleged
The SEC first brought the action in January 2023, alleging that Gemini and Genesis had offered and sold unregistered securities through the Gemini Earn programme.
The complaint argued the structure of Earn – in which customers transferred digital assets to Genesis in exchange for yield, with Gemini marketing and facilitating the product – amounted to an investment contract requiring registration under federal securities laws.
The Commission’s position was that the Earn arrangement fell within the scope of the Securities Act because customer assets were pooled and deployed by Genesis, while Gemini acted as the public‑facing promoter of the programme. The SEC maintained that neither party had made the required disclosures to investors before launching the product.
