SEC Dismisses Lawsuit Against Gemini and Genesis

TLDR

• SEC dismissed lawsuit on January 23, 2026.
• Gemini recovered $940 million for investors through bankruptcy.
• Gemini contributed $40 million towards investor recovery.

The U.S. Securities and Exchange Commission (SEC) has dismissed its lawsuit against Gemini Trust Company and Genesis Global Capital. This decision comes after the full recovery of investor funds associated with Gemini’s Earn program. The lawsuit dismissal occurred on January 23, 2026, following the program’s issues that arose when Genesis froze $940 million in assets post-2022 FTX collapse.

The SEC’s allegations in 2023 centered on the unregistered sale of securities through the Earn program, where users lent their crypto assets to Genesis for high yields. However, the full in-kind return of crypto assets to investors led to the recent lawsuit resolution.

Details of the Legal Dismissal

The SEC stated in a joint court filing that its decision to dismiss the case was based on the complete recovery of investor assets and further discretion. “The 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements noted above, and in the exercise of its discretion, the Commission believes the dismissal of the claims against Defendant is appropriate,” the SEC document read. For more information on ongoing SEC actions, see the SEC Litigation Release.

The dismissal of the lawsuit comes after Gemini contributed up to $40 million towards full investor recovery. The recovery was achieved via 100% in-kind crypto returns through Genesis’s bankruptcy proceedings in May and June 2024. Genesis separately settled with the SEC for $21 million, concluding the process.

Background on Gemini and Genesis

Gemini Trust Company was founded by the Winklevoss twins, Tyler and Cameron. The company’s Earn program, launched in 2021, intended to provide investors with yields by lending crypto assets to Genesis. However, following the FTX collapse in 2022, Genesis froze a substantial amount of these assets, leading to substantial legal scrutiny.

Founded in 2014, Gemini aimed to establish itself as a compliant U.S. crypto exchange with a strong focus on regulatory adherence. This compliance focus stems partly from the Winklevoss twins’ history in Bitcoin investments and their notable legal engagements, including a significant lawsuit against Facebook in 2008.

Implications for the Crypto Market

This recent legal development does not signal a shift in regulatory policies or enforcement practices by the SEC. Instead, it is case-specific, tied to the complete remediation provided to investors. No explicit mention of affected cryptocurrencies, such as Ethereum or Bitcoin, is noted in the documentation, and no related governance or DeFi tokens are referenced.

With no broader funding allocations or new institutional involvement observed, the case remains a distinct event focused solely on resolving the Earn program’s issues. The legal dismissal could be seen as a step forward for Gemini, reinforcing the need for careful adherence to regulation within the evolving crypto market space.