The U.S. Securities and Exchange Commission on Friday agreed to dismiss its enforcement case against a cryptocurrency exchange founded by billionaire twins Tyler and Cameron Winklevoss. The decision followed the full recovery of investor assets tied to the company’s crypto lending programme.
The regulator and the exchange, now known as Gemini Space Station, filed a joint stipulation in federal court in Manhattan seeking dismissal of the lawsuit. The filing cited the complete return of crypto assets to Gemini Earn investors through the bankruptcy process of Genesis Global Capital between May and June 2024.
The SEC had already decided last year to resolve the case, according to the court document. The dismissal marks a notable shift in tone as the regulator recalibrates its approach to digital asset enforcement.
Regulatory shift under new administration
The SEC’s move comes as crypto policy in the United States evolves under President Donald Trump. Trump has described himself as a “crypto president” and has pledged to introduce more favourable rules for the sector while encouraging wider adoption of digital currencies.
Although the case is being dropped, the SEC stressed that the decision does not signal any broader change in its stance on other crypto related lawsuits. Instead, the regulator said the outcome was driven specifically by the full restitution of investor assets.
Gemini did not immediately respond to a request for comment outside normal business hours.
Origins of the lawsuit
In 2023, the SEC charged Genesis Global Capital and Gemini Trust Company with illegally selling securities through their crypto lending product, Gemini Earn. The programme allowed customers to lend their crypto assets to Genesis in exchange for interest payments.
At the time Genesis froze customer withdrawals in November 2022, the total value of assets in the Gemini Earn programme stood at 940 million dollars, Gemini had previously disclosed. The freeze followed a wider market collapse that pushed several crypto firms into bankruptcy.
Full recovery for investors
Unlike many companies that failed during the 2022 downturn, Genesis was able to return customer assets in kind. Rather than liquidating holdings and issuing cash repayments, the firm distributed the original crypto assets back to investors.
After what the SEC described as the “100 percent in kind return” of Gemini Earn assets through the Genesis bankruptcy and related settlements, the Commission said dismissal of the claims was appropriate. The language in the filing made clear that the regulator considered investor restitution a central factor in its decision.
Market confidence and future outlook
Gemini has since strengthened its market position. Last year, the exchange made a strong debut on Nasdaq, highlighting growing institutional interest in digital assets. According to data from LSEG, the company is currently valued at 1.14 billion dollars.
The dismissal closes a high profile chapter for Gemini and underscores how regulatory outcomes may increasingly hinge on investor protection and recovery, even as the broader crypto industry continues to evolve.
With inputs from Reuters
