SEC Drops Lawsuit Against Gemini After Users Get 100% Funds Back

The post SEC Drops Lawsuit Against Gemini After Users Get 100% Funds Back appeared first on Coinpedia Fintech News

The U.S Securities and Exchange Commission has officially dropped its civil lawsuit against Gemini Trust Company, a major relief for the crypto exchange founders Tyler and Cameron Winklevoss.

The decision comes after Gemini Earn users received all their crypto back, bringing an end to a long legal case that started in 2023.

SEC Drops Gemini Earn Lawsuits

According to the 23rd January 2026 filing, the SEC and Gemini Trust Company jointly agreed to dismiss the case with prejudice, meaning it cannot be reopened. The SEC said the decision was made using its own judgment, with investor repayment playing a major role.

All affected Gemini Earn users received a 100% return of their crypto assets, not cash. These repayments were completed through the Genesis Global Capital bankruptcy process between May and June 2024.

By returning users crypto in full, the SEC noted that investor harm was significantly reduced.

The U.S. Securities and Exchange Commission today filed a joint stipulation with Gemini Trust Company, LLC to dismiss, with prejudice, its ongoing civil enforcement action against the company. The case originated from an enforcement action initiated in January 2023 concerning the…

The regulator also pointed out that Gemini had already settled related issues with several state regulators. Taken together, these steps supported the decision to fully dismiss the lawsuit.

Background of Gemini Earn Case

The case traces back to December 2020, when Gemini partnered with Genesis, a crypto lending firm linked to Digital Currency Group. Through this arrangement, Gemini users could lend their crypto to Genesis in return for interest payments.

Problems began when Genesis collapsed during the broader crypto market downturn. Withdrawals were frozen, leaving around $900 million in crypto assets belonging to nearly 340,000 users locked and inaccessible.

To help resolve the situation, Gemini later contributed about $40 million in Bitcoin and $10 million in other assets, and also paid a $37 million penalty as part of a separate settlement with New York regulators.

Over time, Gemini worked through multiple legal and regulatory processes at both the state and federal levels, with the full repayment of users emerging as the key turning point in closing the case.