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The US Securities and Exchange Commission (SEC) on Friday agreed to dismiss its enforcement case against a cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss, after investors in its lending program recovered their assets in full.
The SEC has taken a series of industry-friendly actions in recent years, a shift in its approach to crypto enforcement under Donald Trump, who promised to be the “crypto president”. He brought in more favorable rules and pledged to popularize mainstream use of digital currencies.
The SEC and the exchange now known as Gemini Space Station filed a joint stipulation in federal court in Manhattan to dismiss the case, citing the complete return of crypto assets to Gemini Earn investors through the Genesis Global Capital bankruptcy process between May and June 2024.
The financial regulator had decided to resolve the lawsuit last year. Gemini did not immediately respond to a request for comment.
Trump’s administration has boosted the crypto industry and reversed Joe Biden’s push for stricter enforcement of financial regulations. Trump pardoned Binance founder Changpeng Zhao and launched his own cryptocurrency.
In 2023, the SEC charged Genesis Global Capital and Gemini Trust Company with illegally selling securities to hundreds of thousands of investors through their crypto lending program.
Gemini customers who participated in the Gemini Earn program loaned their crypto to Genesis and were paid interest on their loaned assets. The total value of the Gemini Earn assets was $940m when Genesis froze customer accounts in November 2022, the company previously said.
The New York state attorney general pursued the company in court in the wake of the scandal, winning a $50m settlement that went towards making users whole. Unlike other crypto companies that went bankrupt after a 2022 market crash, Genesis was able to return customers’ crypto to them rather than liquidating a limited pool of assets and paying them back in cash. Gemini was banned from operating a crypto lending program in New York as part of the settlement.
After “the 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements … the Commission believes the dismissal of the claims against Defendant is appropriate,” according to the court document filed on Friday.
The SEC emphasized that its decision to seek dismissal does not reflect its position on any other case.
Gemini last year made a strong debut on Nasdaq, underlining the rapid institutional adoption that has renewed investor optimism for digital assets. The exchange is now valued at $1.14bn, according to data provided by LSEG.