The US Securities and Exchange Commission (SEC) has formally dropped its civil enforcement action against Gemini Trust Company, closing a high-profile case from the Gary Gensler era.
In a filing on 23 Jan, the commission moved to dismiss the case with prejudice, citing the 100% in-kind return of customer assets to Gemini Earn investors and the resolution of parallel regulatory actions.
The dismissal prevents the agency from re-filing the same claims, effectively ending a legal battle that began with a lawsuit in January 2023. The commission stated the decision reflects an "exercise of discretion" and does not necessarily indicate its position on other pending litigation.
Dismantling the Gensler era backlog
The lawsuit originally accused Gemini and Genesis Global Capital of offering unregistered securities through the Gemini Earn lending programme. At its peak, the programme held approximately $900mn in customer assets from over 340,000 investors before collapsing in late 2022. Reports from Bloomberg and Reuters at the time characterized the case as a centerpiece of a broader enforcement drive aimed at crypto lending platforms.
Since Paul Atkins took over as chair, the SEC has pivoted. Under Atkins, the SEC crypto enforcement has collapsed, narrowing its focus to fraud and market abuse rather than token classification disputes. This shift has been accompanied by the exit of senior officials, as seen with Crenshaw’s departure, while Republicans in Congress push the GENIUS Act to move spot market oversight toward the Commodity Futures Trading Commission.
Market implications for Gemini public listing
The legal resolution arrives after Gemini completed its Nasdaq IPO in Sep 2025. The exchange raised $425mn and debuted at a valuation of $3.8bn, with shares soaring 14% on their first day of trading.
The removal of this legal hurdle aligns with the exchange’s strategy to position itself as a compliance-first bridge for institutional capital. With the regulatory cloud lifting, Gemini is moving to expand its institutional custody and staking services. The dismissal confirms that cases once seen as central to US crypto enforcement are now being quietly retired, signaling a decisive break from the previous administration’s approach.
