On March 23, the U.S. Securities and Exchange Commission (SEC) filed an agreement in a New York federal court, announcing that it was withdrawing its civil lawsuit against Gemini Earn on the grounds of "previously biased" actions. This concludes the case, and the same grounds cannot be challenged again in the future. This decision signifies a significant shift in the SEC's enforcement strategy in the crypto space.
SEC withdraws lawsuit against Gemini Earn
After Gemini Earn collapsed due to its inability to repay principal, the SEC charged Gemini and Genesis in 2023 with failing to register their securities offerings in accordance with the law.
With the completion of Genesis' bankruptcy reorganization, investors' assets have been fully returned, and the SEC stated that it withdrew the case after considering "judicial resources" and "investors have received 100% compensation".
Physical returns mitigate investor losses
Gemini and Genesis previously reached an agreement with creditors to repay them in kind. Investors who deposited one Bitcoin when the platform closed would ultimately receive one Bitcoin back, instead of receiving its value in US dollars at the time.
The Winklevoss brothers, owners of Gemini, injected an additional $40 million to cover the shortfall and eliminate concerns about further losses. Crypto bankruptcy cases are usually priced in fiat currency, making Gemini's case relatively rare and depriving the SEC of a victim base for continued litigation.
Shift in regulatory attitude
Since Paul Atkins took over as SEC chairman in 2025, he has favored a clearer approach to the crypto industry, replacing the previous approach of issuing fines and then clarifying the issues.
According to statistics from the Harvard Law School Forum , SEC enforcement actions related to cryptocurrencies are projected to decrease by 60% annually in 2025. During the same period last year, some allegations against Binance were also adjusted, indicating that regulators are focusing their efforts on high-risk activities such as investment fraud and misappropriation of funds, rather than compliance issues of startups.
The Winklevoss brothers responded to the court's decision with a brief statement:
We are pleased that this chapter has finally come to an end and Earn users have fully recovered their assets.
As long as the platform can ensure the safety of users' assets and properly repay them, the incident will be resolved safely, showing crypto users that there is more than one responsible exchange.
