Gemini Trust Company (“Gemini”) is a New York‑based cryptocurrency trust company founded by Tyler and Cameron Winklevoss. The associated cryptocurrency exchange is now known as Gemini Space Station. The Securities and Exchange Commission’s 2023 lawsuit against Gemini was one of the most closely watched legal battles to emerge from the turmoil of the 2022 crypto‑market collapses. On January 23, 2026, the lawsuit came to an end with a dismissal of the case.
The Underlying Lawsuit
The roots of the SEC’s action stretch back to the Gemini Earn program, a yield‑bearing product that allowed Gemini customers to lend their crypto assets to Genesis Global Capital in exchange for interest. Gemini was the agent and promoter for this program, collecting a fee. The program collapsed abruptly in November 2022, when Genesis froze withdrawals amid the broader liquidity crisis following the FTX implosion. At the time, approximately $940 million in Earn users’ assets became inaccessible and remained frozen for months.
In January 2023, the SEC filed a civil enforcement action against both Gemini and Genesis. The agency alleged that the Earn program constituted an unregistered securities offering, arguing that the companies had marketed a yield‑generating product that fell squarely within the definition of a securities lending arrangement without satisfying federal registration requirements.
This enforcement action was part of a broader wave of SEC scrutiny directed at crypto‑lending programs in the aftermath of failures at Celsius, BlockFi, and other firms during the 2022 downturn. The Gemini/Genesis case quickly became one of the most prominent test cases for applying securities law to yield‑based crypto products.
Bankruptcy and Restitution
The turning point did not come in court but in bankruptcy proceedings. Genesis filed for Chapter 11 protection in January 2023, and over the following year negotiated creditor agreements that resulted in full in‑kind recovery of crypto assets for Earn users. Between May and June 2024, customers received 100% of their crypto assets back, denominated in the same tokens they had originally lent.
Gemini itself contributed tens of millions of dollars, including through settlement of a lawsuit with the New York State Department of Finance under which Gemini agreed to contribute $40 million to help fund the return of crypto assets to Gemini Earn investors. Genesis separately resolved its SEC matter in March 2024 with a $21 million penalty, removing another regulatory obstacle. In essence, the combined effect of bankruptcy‑court administration and negotiated settlements fully cured the investor harm that underpinned the SEC’s claims.
Once users were made whole, the SEC began reassessing the value of continued litigation. What followed aligned with a broader post‑2024 regulatory pattern. Since the start of the new administration, the SEC has increasingly opted to pause, dismiss, or soften crypto‑related cases once restitution has been achieved or litigation no longer appears necessary.
The Dismissal
In a stipulation filed with the court on January 23, 2026, the case was dismissed with prejudice, permanently ending the agency’s ability to refile the same claims. The in-kind return was key to the dismissal, as the stipulation states: “The 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements noted above, and in the exercise of its discretion, the Commission believes the dismissal of the claims against Defendant is appropriate.”
The dismissal does not reflect any broader legal conclusion regarding whether Gemini Earn was a securities offer. Indeed, the stipulation specifically notes that the Commission’s decision “does not necessarily reflect the Commission’s position on any other case.”
The settlement was a pragmatic resolution reflecting the absence of remaining investor harm. The situation was unlike those of other crypto companies that went bankrupt after the 2022 crypto winter. Genesis/Gemini was able to return customers’ crypto to them rather than liquidating a limited pool of assets and paying them back in cash.
As a result of being paid in-kind, many Gemini Earn investors actually received a multiple of the value that was initially frozen. For example, a customer who loaned one Bitcoin to Genesis and got one Bitcoin back benefited from the dramatic rise in Bitcoin (more than $50,000) between January 2023 and May 2024.
Conclusion
The history of the SEC’s case against Gemini reveals a story not of courtroom victory but of remedial action and regulatory discretion. What began as a defining test of whether crypto yield products are securities ended with a dismissal driven by restitution, pragmatism, and a changed enforcement landscape. For market participants, the takeaway is twofold: restoring investor funds can dramatically reshape regulatory exposure, but the legal status of crypto‑lending products remains unsettled. As the industry evolves and political winds shift, the Gemini saga stands as both a cautionary tale and an instructive precedent for how crypto enforcement actions may conclude—not with a landmark ruling, but with the quiet closing of a case whose central harms have already been repaired.
