Gemini Nears SEC Settlement Over Earn Program Lawsuit

Gemini may finally be closing a long legal chapter. A new court filing in New York reveals the crypto exchange has reached a tentative agreement with the U.S. Securities and Exchange Commission (SEC) to settle the high-profile case tied to its Earn lending program. The settlement is something that was expected to happen for a long time now.

Good to Know

• Settlement “in principle” has been reached between Gemini and the SEC.
• $900M in user funds froze when Genesis collapsed in 2022.
• Gemini IPO raised $425M this month, valuing the company at $3.3B.

The Settlement Process

Lawyers for both sides told U.S. District Judge Edgardo Ramos they had agreed “in principle” to resolve the matter. The filing asked the court to pause deadlines until December 15 while the paperwork is completed. Reuters reported the development on September 16, though neither Gemini nor the SEC has issued public comment.

The deal, once finalized, would mark the end of one of the crypto industry’s longest-running standoffs with regulators.

What Happened With Earn

Gemini Earn was designed to let customers lend Bitcoin and other cryptocurrencies to Genesis Global Capital in exchange for yield, while Gemini took a cut of up to 4.29%. At its peak, the program had hundreds of thousands of users.

When Genesis froze withdrawals in November 2022 following the collapse of FTX, the fallout was immediate. Roughly 340,000 Earn users saw $900 million in assets stranded. Genesis filed for bankruptcy just weeks later in January 2023.

The SEC then sued both Gemini and Genesis, alleging that the Earn program violated investor-protection rules. Genesis paid $21 million earlier this year to settle without admitting wrongdoing. Gemini, however, continued to fight.

Just days earlier, the company completed its long-anticipated IPO, raising $425 million and securing a valuation of $3.3 billion. Shares debuted at $28 and have already climbed to $32.52, giving the exchange momentum as it transitions into life as a public company.

By resolving the Earn dispute, Gemini is aiming to rebuild trust, distance itself from the Genesis fallout, and present a cleaner slate to investors in what many view as a lighter regulatory environment for crypto firms compared to the post-FTX crackdown period.

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Final approval of the deal rests with the SEC. If completed, it could close one of the most contentious crypto cases in recent memory and allow Gemini to focus squarely on its future as a publicly listed exchange.