The cryptocurrency exchange Gemini Trust and the U.S. Securities and Exchange Commission (SEC) filed a joint request to delay the ongoing Gemini Earn program lawsuit for 60 days. This period will be used to examine potential solutions and suspend all active deadlines.
Gemini Earn Lawsuit and Current Status
The lawsuit was initiated in 2023 when the SEC accused Gemini of offering its Gemini Earn program to retail investors without proper registration. The SEC claims that Gemini and Genesis Global Capital bypassed crucial disclosure requirements, unlawfully raising billions of dollars through the program.
Genesis Bankruptcy and SEC Allegations
In November 2022, Genesis halted withdrawals, and in January 2023, filed for bankruptcy, holding $900 million in assets from about 340,000 Gemini Earn customers. The SEC asserts that failing to register Gemini Earn exposed investors to risks and lacked the protections typically found in registered investment schemes. In March 2024, Genesis agreed to a $21 million settlement without admitting wrongdoing. Meanwhile, Gemini continues to deny the SEC's allegations, maintaining the program was not subject to registration.
SEC's Shift in Regulatory Approach
Under President Donald Trump's administration, the SEC eased its regulatory stance on cryptocurrency markets. The Commission halted legal actions against major exchanges like Coinbase and Kraken and settled with Ripple Labs. The community views these regulatory shifts as positive, anticipating more favorable conditions. In a separate agreement with New York regulators, Gemini agreed to repay customers at least $1.1 billion, demonstrating ongoing efforts toward financial solutions.
The ongoing case between Gemini and the SEC highlights the complexities of regulating cryptocurrency markets and underscores the need for harmonious solutions that protect investors while supporting innovation in digital assets.
