US SEC Drops Civil Lawsuit Against Gemini with Prejudice

Highlights:

• The US SEC has closed its investigations into Gemini without pursuing any enforcement action.
• The US regulators said their decision stems from their own judgment and does not apply to other related cases.
• Gemini had reached settlements with state regulators and other relevant agencies over its Gemini Earn program.

The United States Securities and Exchange Commission (SEC) has officially dismissed its civil enforcement case against Gemini Trust Company LLC, a New York-based cryptocurrency exchange. In a filing dated January 23, the US regulator submitted a joint agreement with Gemini, requesting the court to permanently end the case with no enforcement actions. According to the court document, the SEC’s decision stems from its own judgment.

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In the filing, the SEC explained:

“As stated in the joint stipulation, the Commission’s decision to seek dismissal of this action is in the exercise of its discretion.”  

The US crypto agency highlighted two main factors that influenced its decision to drop the case against Gemini. First, the crypto exchange fully refunded all Gemini Earn users with the exact digital assets they originally deposited. Secondly, the trading platform reached settlements with state regulators and other authorities over the same program. The SEC noted that its decision applies only to Gemini’s case and should not be seen as a model for handling other related cases. 

The U.S. Securities and Exchange Commission today filed a joint stipulation with Gemini Trust Company, LLC to dismiss, with prejudice, its ongoing civil enforcement action against the company. The case originated from an enforcement action initiated in January 2023 concerning the…

— Wu Blockchain (@WuBlockchain) January 23, 2026

The Origin of the SEC and Gemini Dispute

The issue began when Genesis Global Capital, a crypto lending firm, partnered with Gemini to launch Gemini Earn in late 2020. The program allowed Gemini users to earn interest from lending their crypto assets to Genesis. Gemini was the middleman in the business model. It helped move customers’ funds to Genesis and charged transaction fees from the interest paid to users. 

In early 2021, the program expanded to US retail investors. Hundreds of thousands of users placed their digital assets into the program, trusting that they could withdraw their funds with interest when needed. The program was running smoothly until November 2022, when Genesis announced that it could no longer process withdrawals. 

The company said it lacked the liquidity to repay customers following a devastating crypto market decline. At that time, about $900 million from 340,000 Gemini Earn users was frozen. The program was subsequently shut down, preventing users from accessing their funds and prompting the US SEC to take regulatory action. In January 2023, the SEC charged Genesis and Gemini for failing to register the Gemini Earn program as a securities offering under US law. 

The US regulatory agency stated:

“Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors.”

Gemini just dodged the SEC’s enforcement bullet after fully returning every single crypto token to investors caught in the Genesis bankruptcy mess. No cash shortcuts, just token-for-token restitution. The SEC pulled out its hammer—not because they suddenly turned soft, but… pic.twitter.com/ocjnJVnqat

— Fama Crypto (@Famacrypt) January 24, 2026

US SEC Continues to Dismiss Similar Civil Lawsuit Against Other Crypto Platforms

On January 14, the Zcash Foundation disclosed that the US SEC has ended a long-standing investigation against it. The probe into the foundation started in August 2023, when it received a subpoena linked to an internal SEC matter labelled SF-04569. The investigations focused on whether specific digital offerings complied with federal securities laws. 

Throughout the investigation period, the Zcash Foundation noted that it cooperated fully with the regulatory body by providing all requested information. This led the SEC to close the case without charges or corrective measures. Aside from the Zcash Foundation, the SEC, led by Paul Atkins, had dropped several other high-profile cases against crypto companies. Most of which ended without pursuing any enforcement action. Some of the affected firms include Coinbase, Robinhood, Kraken, OpenSea, Uniswap Labs, and several others.

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