The US Securities and Exchange Commission’s civil lawsuit against Gemini Trust Company and Genesis Global Capital has been dismissed with prejudice, effectively ending the long-running legal dispute. Court filings show the parties jointly agreed to dismiss the case in the Southern District of New York. The dismissal still requires approval from a federal judge to become final. Once approved, the SEC will be permanently barred from bringing the same claims again. The lawsuit centered on Gemini’s Earn program, which allowed customers to lend crypto assets through Genesis. The SEC had alleged the program involved the sale of unregistered securities. The case was originally filed in January 2023 during a period of aggressive regulatory enforcement against crypto firms. The dismissal marks a significant legal victory for Gemini and the broader crypto industry. It also signals a shift in regulatory priorities under the current administration. Background of the Earn Program Gemini Earn allowed customers to earn interest by lending digital assets to Genesis. Genesis then used those assets for institutional lending and trading activities. The program collapsed following Genesis’s bankruptcy in 2022 after major market disruptions. Many investors feared they would never recover their funds. However, the bankruptcy process ultimately resulted in a 100% in-kind return of assets. The SEC cited this recovery as one reason it agreed to dismiss the case. Gemini also committed up to $40 million to support the full repayment of customers. The regulator acknowledged that customer harm had been effectively resolved. Genesis had already settled with the SEC earlier by paying a $21 million fine. That settlement removed Genesis from further litigation risk related to the case. Regulatory Shift Under New Leadership The SEC paused the Gemini lawsuit in April 2024 while Mark Uyeda was serving as acting chairman. The pause suggested the agency was reassessing its broader crypto enforcement strategy. Since the Trump administration took office in January 2025, several crypto cases have been dropped. The administration has publicly promised to reduce regulatory pressure on the digital asset sector. Gemini’s case adds to a growing list of abandoned lawsuits. Other firms benefiting from dismissals include Binance, Kraken, Uniswap, Immutable, and Robinhood. The trend signals a dramatic departure from the aggressive enforcement seen under the prior administration. Regulators now appear more focused on collaboration and clarity rather than punishment. This shift has been welcomed by much of the crypto industry. It has also improved investor confidence across digital asset markets. Impact on the Crypto Industry The dismissal provides reassurance that crypto lending programs may be revisited under clearer legal frameworks. Many companies paused innovation after facing legal uncertainty. With the SEC retreating from several major cases, development may accelerate again. Firms may feel more comfortable launching new financial products. The outcome also highlights the importance of bankruptcy resolution in regulatory negotiations. Returning customer funds played a decisive role in shaping the SEC’s decision. That sets a precedent for how similar cases might be handled in the future. It shows regulators are willing to compromise when investor losses are fully addressed. The case also reinforces the importance of compliance transparency. Crypto firms are expected to work more closely with regulators going forward. Broader Legal Developments The SEC is not the only agency pulling back from crypto litigation. The Department of Justice recently dismissed its NFT insider trading case against Nathaniel Chastain. That decision followed a federal appeals court reversal of his earlier convictions. The outcome further weakens the government’s recent track record in crypto prosecutions. Together, these dismissals indicate a cooling of legal hostilities toward digital assets. They suggest a more balanced regulatory environment may be emerging. For crypto companies, this represents a chance to rebuild trust and credibility. For investors, it offers greater confidence that the market is stabilizing legally. The Gemini dismissal may become a landmark moment in crypto regulation history. It could mark the beginning of a more cooperative era between regulators and innovators.
