SEC Dismisses Lawsuit Against Gemini After Full Payout

SEC Withdraws Charges Following Gemini Earn Payout

The U.S. Securities and Exchange Commission (SEC) has filed to dismiss its lawsuit against the cryptocurrency exchange Gemini. The decision follows the complete, in-kind return of crypto assets to investors in the Gemini Earn program through the Genesis Global Capital bankruptcy proceedings.

Situational Overview

In 2023, the SEC charged Gemini and its partner, Genesis Global Capital, with illegally offering unregistered securities via the Gemini Earn program. When Genesis halted withdrawals in November 2022, approximately $940 million in customer assets were frozen. Between May and June 2024, investors successfully recovered 100% of their digital assets in-kind through the Genesis bankruptcy.

Market and Regulatory Impact

This dismissal is a significant resolution for Gemini, which is currently valued at $1.14 billion according to LSEG data. The successful asset recovery sets a positive precedent for customer protection within the crypto industry. The SEC clarified that this decision does not influence its position on any other ongoing litigation, as the regulatory landscape for digital assets continues to evolve.

Conclusion and Future Outlook

The resolution of the SEC's case against Gemini marks a key milestone for the exchange and its customers. While this specific case is closed, the broader crypto industry remains under regulatory scrutiny. Market participants will continue to monitor future regulatory actions and their impact on digital asset platforms.

FAQ

Q: Why did the SEC dismiss the case against Gemini?
A: The SEC dismissed the case because all Gemini Earn investors received a 100% in-kind return of their crypto assets through the Genesis bankruptcy.

Q: What was the Gemini Earn program?
A: It was a crypto lending program where Gemini customers loaned their digital assets to Genesis Global Capital to earn interest.

Q: How much in assets were recovered by investors?
A: Investors recovered assets that were valued at approximately $940 million when accounts were frozen in November 2022.

Source: Investing.com