The United States Securities and Exchange Commission (SEC) and Gemini Trust Company are making progress in resolving a longstanding securities dispute.
Filing Details and Next Steps
In a joint filing submitted on Monday to the U.S. District Court for the Southern District of New York, both parties confirmed they had reached a "resolution in principle" and requested that the case be indefinitely stayed while the agreement is finalized. The arrangement still requires review and approval by the SEC. If the case is not concluded by December 15, the two sides said they would provide another update to the court.
Background of the Dispute
The case originated from a complaint filed in January 2023, where the SEC alleged that Gemini Trust and Genesis Global Capital engaged in the unregistered offer and sale of securities to U.S. retail investors between February 2021 and November 2022. At the core of the case was Gemini’s Earn program, which allowed investors to lend their digital assets to Genesis with the expectation of earning interest. The SEC argued that the companies raised "billions of dollars’ worth of crypto assets" without proper registration.
Settlement Developments
The latest resolution comes after Genesis agreed in 2024 to pay $21 million in a settlement with the SEC, marking a significant step in winding down the case. Earlier this year, the SEC, under acting chair Mark Uyeda, informed Gemini that it would not pursue enforcement action in another investigation tied to the firm.
The resolution in principle signifies more than just the conclusion of one lawsuit; it may influence how the SEC enforces existing securities laws against crypto firms offering yield products.
