SEC and Gemini request two-month stay of litigation as 'possible settlement' under discussion
In 2023, the Securities and Exchange Commission filed a lawsuit against Gemini over its now-defunct Earn product.
Sam Reynolds, Cheyenne Ligon | Edited by Sheldon Rebeck, Nikkhilesh De Updated April 2, 2025, 2:04 PM Published April 2, 2025, 9:03 AM
Key points:
- The SEC and Gemini have filed a request for a 60-day stay in the lawsuit to consider a possible resolution.
- In January 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against Gemini for allegedly offering unregistered securities through its Earn product.
- Genesis Global Capital, also the target of the SEC suit, agreed to pay $21 million in March 2024, ending its participation in the case.
A potential resolution to the long-running legal battle between the U.S. Securities and Exchange Commission (SEC) and Gemini over the cryptocurrency company's Earn product may soon be found.
On Tuesday, they filed a joint motion in the U.S. District Court for the Southern District of New York asking it to consider a 60-day stay of the case while they explore a potential settlement.
The motion mirrors similar requests the SEC has made in other crypto-related cases, including lawsuits against Binance and Tron that were upheld by the court. The regulator also filed a similar motion in its case against Coinbase before later withdrawing the suit entirely.
The SEC filed a lawsuit against Gemini and bankrupt crypto lender Genesis in January 2023, alleging that both companies violated securities laws through the Gemini Earn program. Under the Earn program, retail investors were promised up to 8% annual interest — paid by Genesis — on tokens invested through the program.
When Genesis suspended withdrawals after FTX collapsed in November 2022, the platform ended up with about $900 million in user funds frozen, according to the SEC’s initial complaint. This led to a public spat between the two companies’ management, and by January 10, 2023, Gemini had shut down the Earn program. Two days later, the SEC filed charges against both companies. Genesis filed for bankruptcy that same month. In February 2024, Genesis agreed to pay the SEC a $21 million fine to settle the charges.
A separate SEC investigation into Gemini was closed in February.
More: SEC ends Gemini investigation, Cameron Winklevoss seeks compensation
Both the stayed litigation and the concluded investigation into Gemini are part of the SEC’s ongoing shift in approach away from former Chairman Gary Gensler’s so-called “regulation through enforcement” strategy toward more lenient regulation of cryptocurrencies. Under Acting Chairman Mark Uyeda, the agency has dismissed numerous enforcement cases, including those against Ripple and Cumberland DR.
Источник
